Selected Highlights from California’s Constitution, Part lV

The California Constitution, one of the longest of the fifty states, has 32 articles (even though the last one is numbered 35), and three articles contain subparts (Articles 10, 13 and 19). There are approximately 365 sections contained in those articles. The following is an overview of the specific provisions of the state constitution.

Part lll is HERE with Articles lX – Xl

Part ll is HERE with Articles lV – Vll

Part l is HERE with Articles l – lll

ARTICLE XII PUBLIC UTILITIES [Sections 1 – 9]

Article 12 was added by Proposition 12 at the November 5, 1974 election. This article contains the following nine sections:

Section 1 provides for the Public Utilities Commission that consists of 5 members appointed by the Governor and approved by the Senate, a majority of the membership concurring, for staggered 6-year terms. This section also provides that the Legislature may remove a member for incompetence, neglect of duty, or corruption, two thirds of the membership of each house concurring.  

Section 2 states that that, subject to statute and due process, the commission may establish its own procedures.

Section 3 provides that private corporations and persons that own, operate, control, or manage a line, plant, or system for the transportation of people or property, the transmission of telephone and telegraph messages, or the production, generation, transmission, or furnishing of heat, light, water, power, storage, or wharfage directly or indirectly to or for the public, and common carriers, are public utilities subject to control by the Legislature. 

Section 4 provides that the commission may fix rates and establish rules for the transportation of passengers and property by transportation companies, prohibit discrimination, and award reparation for the exaction of unreasonable, excessive, or discriminatory charges.  

Section 5 specifies that the Legislature has plenary power, unlimited by the other provisions of this constitution but consistent with this article, to confer additional authority and jurisdiction upon the commission, to establish the manner and scope of review of commission action in a court of record, and to enable it to fix just compensation for utility property taken by eminent domain.  

Section 6 provides that the commission may fix rates, establish rules, examine records, issue subpoenas, administer oaths, take testimony, punish for contempt, and prescribe a uniform system of accounts for all public utilities subject to its jurisdiction. 

Section 7 states that a transportation company may not grant free passes or discounts to anyone holding an office in this State and that the acceptance of a pass or discount by a public officer, other than a Public Utilities Commissioner, will cause a forfeiture of that office.  

Section 8 specifies that a city, county, or other public body may not regulate matters over which the Legislature grants regulatory power to the Commission.

Section 9 provides that the provisions of this article restate all related provisions of the Constitution in effect immediately prior to the effective date of this amendment and make no substantive change.

ARTICLE XIII TAXATION [Sections 1 – 36]

Article 13 was added by Proposition 8 on the November 5, 1974 statewide ballot. It contains the following 36 sections:

Section 1 – Unless otherwise provided by this Constitution or the laws of the United States: All property is taxable and shall be assessed at the same percentage of fair market value.  

Section 2 – The Legislature may provide for property taxation of all forms of tangible personal property, shares of capital stock, evidences of indebtedness, and any legal or equitable interest therein not exempt under any other provision of this article. 

Section 3 – There are numerous types of property that are exempt from property taxation.  

Section 3.5 – In any year in which the assessment ratio is changed, the Legislature shall adjust the valuation of assessable property to maintain the same proportionate values of such property.  

Section 4 – The Legislature may exempt from property taxation in whole or in part specified property. 

Section 5 – Exemptions granted or authorized apply to buildings under construction, land required for their convenient use, and equipment in them if the intended use would qualify the property for exemption.  

Section 6 – The failure in any year to claim, in a manner required by the laws in effect at the time the claim is required to be made, an exemption or classification which reduces a property tax shall be deemed a waiver of the exemption or classification for that year.  

Section 7 – The Legislature, two-thirds of the membership of each house concurring, may authorize county boards of supervisors to exempt real property having a full value so low that, if not exempt, the total taxes and applicable subventions on the property would amount to less than the cost of assessing and collecting them.

Section 8 – To promote the conservation, preservation and continued existence of open space lands, the Legislature may define open space land and shall provide that when this land is enforceably restricted, in a manner specified by the Legislature, to recreation, enjoyment of scenic beauty, use or conservation of natural resources, or production of food or fiber, it shall be valued for property tax purposes only on a basis that is consistent with its restrictions and uses.

Section 8.5 – The Legislature may provide by law for the manner in which a person of low or moderate income who is 62 years of age or older may postpone ad valorem property taxes on the dwelling owned and occupied by him or her as his or her principal place of residence.

Section 9 – The Legislature may provide for the assessment for taxation only on the basis of use of a single-family dwelling, as defined by the Legislature, and so much of the land as is required for its convenient use and occupation, when the dwelling is occupied by an owner and located on land zoned exclusively for single-family dwellings or for agricultural purposes. 

Section 10 – Real property in a parcel of 10 or more acres which, on the lien date and for 2 or more years immediately preceding, has been used exclusively for nonprofit golf course purposes shall be assessed for taxation on the basis of such use, plus any value attributable to mines, quarries, hydrocarbon substances, or other minerals in the property or the right to extract hydrocarbons or other minerals from the property.

Section 11 – Lands owned by a local government that are outside its boundaries, including rights to use or divert water from surface or underground sources and any other interests in lands, are taxable if specified conditions are met.  

Section 12 – Taxes on personal property, possessory interests in land, and taxable improvements located on land exempt from taxation which are not a lien upon land sufficient in value to secure their payment shall be levied at the rates for the preceding tax year upon property of the same kind where the taxes were a lien upon land sufficient in value to secure their payment. 

Section 13 – Land and improvements shall be separately assessed.  

Section 14 – All property taxed by local government shall be assessed in the county, city, and district in which it is situated.  

Section 15 – The Legislature may authorize local government to provide for the assessment or reassessment of taxable property physically damaged or destroyed after the lien date to which the assessment or reassessment relates.  

Section 16 – The county board of supervisors, or one or more assessment appeals boards created by the county board of supervisors, shall constitute the county board of equalization for a county.  

Section 17 – The Board of Equalization consists of 5 voting members: The Controller and 4 members elected for 4-year terms at gubernatorial elections. The State shall be divided into four Board of Equalization districts with the voters of each district electing one member. No member may serve more than 2 terms.  

Section 18 – The Board shall measure county assessment levels annually and shall bring those levels into conformity by adjusting entire secured local assessment rolls. 

Section 19 – The Board shall annually assess (1) pipelines, flumes, canals, ditches, and aqueducts lying within 2 or more counties and (2) property, except franchises, owned or used by regulated railway, telegraph, or telephone companies, car companies operating on railways in the State, and companies transmitting or selling gas or electricity.   

Section 20 – The Legislature may provide maximum property tax rates and bonding limits for local governments.  

Section 21 – Within such limits as may be provided, the Legislature shall provide for an annual levy by county governing bodies of school district taxes sufficient to produce annual revenues for each district that the district’s board determines are required for its schools and district functions.  

Section 22 – Not more than 25 percent of the total appropriations from all funds of the State shall be raised by means of taxes on real and personal property according to the value thereof. 

Section 23 – If state boundaries change, the Legislature shall determine how property affected shall be taxed.  

Section 24 – The Legislature may not impose taxes for local purposes but may authorize local governments to impose them.  

Section 25 – The Legislature shall provide, in the same fiscal year, reimbursements to each local government for revenue lost because of Section 3(k).  

Section 25.5 – On or after November 3, 2004, the Legislature shall not enact a statute to do specified things. 

Section 26 – Taxes on or measured by income may be imposed on persons, corporations, or other entities as prescribed by law. Interest on bonds issued by the State or a local government in the State is exempt from taxes on income. 

Section 27 – The Legislature, a majority of the membership of each house concurring, may tax corporations, including state and national banks, and their franchises by any method not prohibited by this Constitution or the Constitution or laws of the United States.  

Section 28 – “Insurer,” as used in this section, includes insurance companies or associations and reciprocal or interinsurance exchanges together with their corporate or other attorneys in fact considered as a single unit, and the State Compensation Insurance Fund.

Section 29 – The Legislature may authorize counties, cities and counties, and cities to enter into contracts to apportion between them the revenue derived from any sales or use tax imposed by them that is collected for them by the State.   

Section 30 – Every tax shall be conclusively presumed to have been paid after 30 years from the time it became a lien unless the property subject to the lien has been sold in the manner provided by the Legislature for the payment of the tax.  

Section 31 – The power to tax may not be surrendered or suspended by grant or contract.  

Section 32 – No legal or equitable process shall issue in any proceeding in any court against this State or any officer thereof to prevent or enjoin the collection of any tax.  

Section 33 – The Legislature shall pass all laws necessary to carry out the provisions of this article.  

Section 34 – Neither the State of California nor any of its political subdivisions shall levy or collect a sales or use tax on the sale of, or the storage, use or other consumption in this State of food products for human consumption except as provided by statute as of the effective date of this section.  

Section 35 – The people of the State of California find and declare certain items of public safety services.  

Section 36 – “Public Safety Services” includes specified services.

ARTICLE XIII A [TAX LIMITATION] [Sections 1 – 7]

Article 13A was added to the Constitution by Proposition 13 on June 6, 1978. It contains the following seven sections:

Section 1 – The maximum amount of any ad valorem tax on real property shall not exceed One percent (1%) of the full cash value of such property. The one percent (1%) tax to be collected by the counties and apportioned according to law to the districts within the counties.

Section 2 – The “full cash value” means the county assessor’s valuation of real property as shown on the 1975–76 tax bill under “full cash value” or, thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment.

Section 3 – Any change in state statute which results in any taxpayer paying a higher tax must be imposed by an act passed by not less than two-thirds of all members elected to each of the two houses of the Legislature, except that no new ad valorem taxes on real property, or sales or transaction taxes on the sales of real property may be imposed.

Section 4 – 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.  

Section 5 – This article shall take effect for the tax year beginning on July 1 following the passage of this Amendment, except Section 3 which shall become effective upon the passage of this article.  

Section 6 – If any section, part, clause, or phrase hereof is for any reason held to be invalid or unconstitutional, the remaining sections shall not be affected but will remain in full force and effect.  

Section 7 – Section 3 of this article does not apply to the California Children and Families First Act of 1998.

ARTICLE XIII B GOVERNMENT SPENDING LIMITATION [Sections 1 – 15]

Article 13B was added to the Constitution by Proposition 4 on the November 6, 1979 ballot. It contains the following fifteen sections: 

Section 1 – The total annual appropriations subject to limitation of the State and of each local government shall not exceed the appropriations limit of the entity of government for the prior year adjusted for the change in the cost of living and the change in population.  

Section 1.5 – The annual calculation of the appropriations limit under this article for each entity of local government shall be reviewed as part of an annual financial audit.  

Section 2 – Fifty percent of all revenues received by the State in a fiscal year and in the fiscal year immediately following it in excess of the amount which may be appropriated by the State in compliance with this article during that fiscal year and the fiscal year immediately following it shall be transferred and allocated, from a fund established for that purpose.  

Section 3 – The appropriations limit for any fiscal year pursuant to Sec. 1 shall be adjusted.  

Section 4 – The appropriations limit imposed on any new or existing entity of government by this Article may be established or changed by the electors of such entity, subject to and in conformity with constitutional and statutory voting requirements.  

Section 5 – Each entity of government may establish such contingency, emergency, unemployment, reserve, retirement, sinking fund, trust, or similar funds as it shall deem reasonable and proper.  

Section 5.5 – The Legislature shall establish a prudent state reserve fund in such amount as it shall deem reasonable and necessary.  

Section 6 – Whenever the Legislature or any state agency mandates a new program or higher level of service on any local government, the State shall provide a subvention of funds to reimburse that local government for the costs of the program or increased level of service, except that the Legislature may, but need not, provide a subvention of funds for the mandates.  

Section 7 – Nothing in this Article shall be construed to impair the ability of the State or of any local government to meet its obligations with respect to existing or future bonded indebtedness.  

Section 8 – This section provides the following definitions: “Appropriations subject to limitation”; “Proceeds of taxes”; “Local government”; “Change in the cost of living”; “Change in population”; “Debt service”; and, “appropriations limit”.  

Section 9 – “Appropriations subject to limitation” for each entity of government do not include specified items.  

Section 10 – This article shall be effective commencing with the first day of the fiscal year following its adoption.  

Section 10.5 – For fiscal years beginning on or after July 1, 1990, the appropriations limit of each entity of government shall be the appropriations limit for the 1986–87 fiscal year adjusted for the changes made from that fiscal year pursuant to this article, as amended by the measure adding this section, adjusted for the changes required by Section 3.  

Section 11 – If any appropriation category shall be added to or removed from appropriations subject to limitation, pursuant to final judgment of any court of competent jurisdiction and any appeal therefrom, the appropriations limit shall be adjusted accordingly.  

Section 12 – “Appropriations subject to limitation” of each entity of government shall not include appropriations of revenue from the Cigarette and Tobacco Products Surtax Fund created by the Tobacco Tax and Health Protection Act of 1988.  

Section 13 – “Appropriations subject to limitation” of each entity of government shall not include appropriations of revenue from the California Children and Families First Trust Fund created by the California Children and Families First Act of 1998.  

Section 14 – “Appropriations subject to limitation” of each entity of government shall not include appropriations of revenue from the California Healthcare, Research and Prevention Tobacco Tax Act of 2016 Fund created by the California Healthcare, Research and Prevention Tobacco Tax Act of 2016.  

Section 15 – “Appropriations subject to limitation” of each entity of government shall not include appropriations of revenues from the Road Maintenance and Rehabilitation Account created by the Road Repair and Accountability Act of 2017, or any other revenues deposited into any other funds pursuant to the act.

ARTICLE XIII C [VOTER APPROVAL FOR LOCAL TAX LEVIES] [Sections 1 – 3]

Article 13C was added to the Constitution by Proposition 218 on the November 5, 1996 ballot. It contains the following three sections:  

Section 1 – The following terms as used in this article are defined: “General tax”; “Local government”; “Special district”; “Special tax”; and “tax”.   

Section 2 – Notwithstanding any other provision of this Constitution, all taxes imposed by any local government shall be deemed to be either general taxes or special taxes. Special purpose districts or agencies, including school districts, shall have no power to levy general taxes.

Section 3 – The initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge.

ARTICLE XIII D [ASSESSMENT AND PROPERTY-RELATED FEE REFORM] [Sections 1 – 6]

Article 13D was added to the Constitution by Proposition 218 on the November 5, 1996 ballot. It contains the following six sections:  

Section 1 – Notwithstanding any other provision of law, the provisions of this article shall apply to all assessments, fees and charges, whether imposed pursuant to state statute or local government charter authority.  

Section 2 – The following terms used in this article are defined: “Agency”; Assessment”; “Capital cost”; “District”; “Fee” or “charge”; “Maintenance and operation expenses”; “Property ownership”; “Property-related service”; and “Special benefit”.  

Section 3 – No tax, assessment, fee, or charge shall be assessed by any agency upon any parcel of property or upon any person as an incident of property ownership except: (1) The ad valorem property tax imposed. (2) Any special tax receiving a two-thirds vote. (3) Assessments as provided by this article. (4) Fees or charges for property related services as provided by this article.   

Section 4 – An agency which proposes to levy an assessment shall identify all parcels which will have a special benefit conferred upon them and upon which an assessment will be imposed.   

Section 5 – The provisions of this article shall become effective the day after the election unless otherwise provided.  

Section 6 – An agency shall follow the procedures pursuant to this section in imposing or increasing any fee or charge as defined pursuant to this article.