10 Cent Per Bag Charge Included as Part of An Ordinance Encouraging Use of Recyclable Grocery Bags Was Not Subject to Proposition 26
By William W. Abbott
Schmeer v. County of Los Angeles (February 2, 2013, B240592) ___Cal.App.4th ___. The County of Los Angeles enacted an ordinance prohibiting retail stores from providing plastic carryout bags and requiring the stores to charge customers 10 cents for each paper bag provided. Among other provisions, the ordinance provided that the money received by the store for recyclable paper carryout bags must be retained by the store and used only for (1) the costs of compliance with the ordinance; (2) the actual costs of providing recyclable paper bags; or (3) the costs of educational materials or other costs of promoting the use of reusable bags.
Taxpayers, along with a manufacturer of plastic bags, filed suit alleging that the fee violated Proposition 26 because the 10-cent charge was in fact a tax that had not been approved by voters. Proposition 26 was passed by the California voters in 2010, and was intended to fill in coverage gaps resulting from judicial interpretations of prior tax control initiatives: Propositions 13 and 218. The trial court rejected this argument on the basis that the collected revenues (10 cents for each recyclable paper carryout bag) were retained by the retail establishment, not the government. As such, the 10-cent fee was not subject to Proposition 26. The plaintiffs/petitioners appealed.
The appellate decision includes a succinct history of key Proposition 13 and 218 decisions. The court also analyzed Proposition 26 in detail, and acknowledged that the measure was ambiguous on the question of “who gets the funds?”. Reading the measure as a whole, the appellate court reached a similar conclusion to that of the trial court: as the enactment did not result in revenue to the county, it was not subject to Proposition 26, and therefore, was not subject to voter approval requirements.
William W. Abbott is a partner at Abbott & Kindermann, LLP. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.
The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, nor the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.