Jacks v. City of Santa Barbara
Annotate this CaseAn individual and a hotel who incurred a one percent surcharge on their electricity bills, collected by Southern California Edison (SCE) and remitted to the City of Santa Barbara, filed a class action challenging its validity. The city did not seek voter approval of the surcharge, which is collected pursuant to an ordinance and franchise agreement with the city. The California Constitution, as amended by Proposition 218, prohibits local governments from imposing new or increased taxes without first obtaining voter consent. (Cal. Const., art. XIII C, 2.) The court of appeal reversed the trial court. The surcharge is an illegal tax masquerading as a franchise fee. Distinguishable precedent cited by the city concerned traditional franchise fees collected for grants of rights of way rather than, as here, a surcharge collected for general revenue purposes.
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