City of Modesto v. Modesto Irrigation District

Respondent, the City of Modesto; is a municipality operating under a home rule charter. Appellants, the Modesto and Turlock Irrigation Districts, are state agencies functioning pursuant to the provisions of the Irrigation District Law as set forth in division 11, commencing with section 20500 of the Water Code; they are presently distributing and selling electrical energy within the boundaries of the chartered city,

In 1970 respondent adopted a utility users’ tax ordinance imposing a tax upon every person in the city who uses water, gas, electricity and telephone service; the tax, in the amount of 5 percent of the monthly or bi-monthly utility charge, is paid by the service user (the consumer), but must be collected by the service supplier. The districts refused to collect the tax and the city instituted this litigation in the court below to compel them to do so; the districts filed a joint appeal from the adverse judgments which followed.

Appellants do not, nor can they, deny that the city’s utility users’ tax is a valid exercise of a chartered city’s power to tax for revenue purposes. (Rivera v. City of Fresno, 6 Cal.3d 132 [ 98 Cal.Rptr. 281 , 490 P.2d 793 ].) Nor do…