Filed 3/10/20
                CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                SECOND APPELLATE DISTRICT

                        DIVISION EIGHT

 LOS ANGELES LEADERSHIP              B292613
 ACADEMY, INC., et al.,
                                     (Los Angeles County
    Plaintiffs and Appellants,       Super. Ct. No. BC599466)

         v.

 JEFFREY PRANG, as Assessor,
 etc., et al.,

    Defendants and Respondents.

     APPEAL from a judgment of the Superior Court of Los
Angeles County. Monica Bachner, Judge. Affirmed.
     Bird, Marella, Boxer, Wolpert, Nessim, Drooks, Lincenberg
& Rhow, Thomas R. Freeman, A. Howard Matz, Hernan D. Vera
and Fanxi Wang for Plaintiffs and Appellants.
     Charter Schools Legal Defense Fund, Julie Ashby
Umansky for California Charter Schools Association as Amicus
Curiae on behalf of Plaintiffs and Appellants.
     Glaser Weil Fink Howard Avchen & Shapiro, Joel N.
Klevens; Mary C. Wickham, County Counsel, Nicole Davis
Tinkham and Justin Y. Kim, Deputy County Counsel, for
Defendants and Respondents.
                   __________________________
                             SUMMARY
       Los Angeles Leadership Academy, Inc. is a nonprofit
charter school that operates on property owned by two related
nonprofit public benefit corporations. The three entities sued the
Assessor of the County of Los Angeles and others for a refund of
property taxes and special assessments, and for declaratory relief
that they have no obligation to pay such taxes and assessments
so long as the properties are held for the benefit of the school and
its operation.
       According to plaintiffs, the threshold question on this
appeal is whether a nonprofit charter school should be treated as
a public school district for purposes of applying the implied
exemption, which they contend exempts public schools from
having to pay both taxes and special assessments. Under the
implied exemption doctrine, school districts are exempt from
having to pay special assessments on properties used for public
school purposes. The California Constitution expressly exempts
public schools from having to pay taxes, and the courts have
found public schools are impliedly exempt from having to pay
special assessments. But there is no such thing as an implied
exemption from taxation.
       The trial court rejected plaintiffs’ claims and entered
judgment for defendants after a court trial. We find no support
in statutory or case law for plaintiffs’ implied exemption claim.
Plaintiffs cannot establish that charter schools are public entities
for purposes of exemption from taxation. Plaintiffs’ policy
arguments to the contrary—that charter schools should be
treated like public entities because monies taken for taxes and
special assessments reduce monies available for educating
students, and put charter schools at a competitive disadvantage




                                 2
with other public schools—are properly addressed to the
Legislature, not to this court.
       The judgment is affirmed.
             FACTUAL AND LEGAL BACKGROUND
       We begin with pertinent legal principles and facts that
illuminate our conclusions.
1.     Background Legal Principles
       Property owned by the state or a local government is
exempt from taxation under the California Constitution. (Cal.
Const., art. XIII, § 3, subds. (a) & (b).) That includes, of course,
property owned by a school district. (San Marcos Water Dist. v.
San Marcos Unified School Dist. (1986) 42 Cal.3d 154, 160-161
(San Marcos) [the state Constitution “provides that property
owned by public entities such as the school district is exempt
from property taxation”].)
       Taxes and special assessments are two different things.
“ ‘[T]axes . . . are levied for general revenue and for general public
improvements; and special assessments . . . are levied for local
improvements which directly benefit specific real property.’ ”
(San Marcos, supra, 42 Cal.3d at p. 162.)
       Publicly owned and used property “ ‘is not exempt from
special assessments under the constitution or statutory law of
this state.’ ” (San Marcos, supra, 42 Cal.3d at p. 161.) There is,
however, “ ‘an implied exemption’ ” of publicly owned and used
property from special assessments. (Ibid.) “ ‘The principle which
makes property of the state . . . nontaxable . . . also precludes the
imposition of a special assessment for a street or other local
improvement upon such property, unless there is a positive
legislative authority therefor.’ ” (Ibid., quoting Inglewood v.
County of Los Angeles (1929) 207 Cal. 697, 703-704 (Inglewood);




                                  3
Regents of the University of California v. East Bay Municipal
Utility Dist. (2005) 130 Cal.App.4th 1361, 1368 (East Bay) [“From
that constitutional exemption, California courts have implied a
further exemption of such property from special assessments,
absent legislative authorization.”].) “The rationale behind a
public entity’s exemption from property taxes and special
assessments is to prevent one tax-supported entity from
siphoning tax money from another such entity; the end result of
such a process could be unnecessary administrative costs and no
actual gain in tax revenues.” (San Marcos, at p. 161.)
2.     Factual Background
       It is undisputed that plaintiffs’ property is exempt from
taxation under the constitutional provision that exempts
property used exclusively for public schools (Cal. Const., art. XIII,
§ 3, subd. (d)). This exemption, however, does not apply to the
pre-occupancy property taxes and special assessments that
plaintiffs seek to recover.
       It is unnecessary to dwell at length on the facts that led to
this litigation. The Academy is a nonprofit public benefit
corporation that operates two charter schools in the Lincoln
Heights neighborhood. It recruits students from communities
with high concentrations of families living below the poverty line.
       The Academy’s schools are located on properties owned by
two other nonprofit public benefit corporations (2670 Griffin
Education Center, Inc. and Florence Crittenton Center, Inc.).
The Academy describes itself as the beneficial owner of the
properties; the ownership structure was necessary so that the
Academy would remain eligible for significant subsidies available
for charter schools that rent the facilities in which they operate.
(Ownership of the properties was an issue at trial, but our




                                  4
resolution of the appeal makes it unnecessary to consider the
parties’ contentions on this point.)
      In March 2015, plaintiffs sought a refund of $222,942.10 in
property taxes and special assessments.1 In May 2015, the
assessor denied the claim. Plaintiffs then filed this lawsuit
seeking the refund, and also seeking a declaration that
defendants may not assess or collect any taxes from the Academy
that are not assessed or collected from traditional public schools.
      As stated at the outset, the trial court found charter schools
are not public entities for purposes of exemption from taxation.
The court entered a final judgment on July 26, 2018, and
plaintiffs filed a timely appeal.2
                            DISCUSSION
      The substance of plaintiffs’ argument is that since a charter
school is deemed to be a “school district” for specific funding laws



1      The refund sought includes “[v]oter indebtedness” or
“bonded indebtedness”; defendants treat bonded indebtedness
like special assessments for exemption purposes.

2      Both parties have filed unopposed requests for judicial
notice. Plaintiffs request judicial notice of two reports prepared
by the Legislative Analyst’s Office that were noticed by the trial
court. Plaintiffs contend these reports “provide[] context for
discerning the Legislature’s intent to provide charter schools with
funding equal to that of traditional private schools.” We grant
the request, but note there is no dispute that charter schools are
eligible for state and local funding equally with other public
schools. Defendants request judicial notice of certain
administrative filings by the California School Finance Authority,
and publications by California agencies and the IRS, which they
say show that the Charter Schools Act treats charter schools


                                 5
(Ed. Code, § 47612, subd. (c)), so too it must be treated as a school
district entitled to the implied exemption from taxation.
       In addition to plaintiffs’ misconception of the implied
exemption principle, their claim has no statutory support and no
support in case law either. And no legislative history is offered to
suggest the Legislature intended, without saying so, to treat
charter schools like school districts or other public entities for
taxation purposes.
       Charter schools and school districts are treated differently
in many ways, some of them with substantial financial
ramifications. Plaintiffs’ arguments are quintessentially policy
arguments, and should be directed to the Legislature.
1.     The Charter Schools Act
       We begin with background on the Charter Schools Act
(CSA, Ed. Code, § 47600 et seq.). Justice Baxter described the
statute in Wells v. One2One Learning Foundation (2006)
39 Cal.4th 1164 (Wells). The CSA “is intended to allow ‘teachers,
parents, pupils, and community members to establish . . . schools
that operate independently from the existing school district
structure.’ (Ed. Code, § 47601.) By this means, the CSA seeks to
expand learning opportunities, encourage innovative teaching
methods, provide expanded public educational choice, and
promote educational competition and accountability within the
public school system. [Citation.] [¶] If statutory requirements
are met, public school authorities must grant the petition of
interested persons for a charter to operate such a school within a
public school district.” (Wells, at p. 1186.)



differently from traditional public schools with respect to a
variety of expenses. We likewise grant this unopposed request.


                                  6
       “For certain purposes, the [charter] school is ‘deemed to be
a “school district” ’ [citation], is ‘part of the Public School system’
[citation], falls under the ‘jurisdiction’ of that system, and is
subject to the ‘exclusive control’ of public school officers
[citations].” (Wells, supra, 39 Cal.4th at p. 1186.) “A charter
school must operate under the terms of its charter, and must
comply with the CSA and other specified laws, but is otherwise
exempt from the laws governing school districts.” (Ibid., citing
Ed. Code, § 47610.) “A charter school may elect to operate as, or
be operated by, a nonprofit corporation organized under the
Nonprofit Public Benefit Corporation Law.” (Wells, at p. 1186.)
“A charter school is eligible for its share of state and local public
education funds, which share is calculated primarily, as with all
public schools, on the basis of its [average daily attendance].”
(Ibid.)
       In addition, Justice Baxter described the relationship
between charter school operators and their chartering districts.
That description is pertinent here. “Though charter schools are
deemed part of the system of public schools for purposes of
academics and state funding eligibility, and are subject to some
oversight by public school officials [citation], the charter schools
here are operated, not by the public school system, but by distinct
outside entities—which the parties characterize as nonprofit
corporations—that are given substantial freedom to achieve
academic results free of interference by the public educational
bureaucracy.” (Wells, supra, 39 Cal.4th at pp. 1200-1201; see id.
at p. 1201 [“The autonomy, and independent responsibility, of
charter school operators extend, in considerable degree, to
financial matters.”].)




                                   7
       In Wells, the court rejected the charter schools’ insistence
that, by virtue of the CSA, they were “entitled to any ‘public
entity’ immunity enjoyed by their chartering districts.” (Wells,
supra, 39 Cal.4th at p. 1200.) Wells held that public school
districts are not persons who could be sued under the California
False Claims Act (Gov. Code, § 12650 et seq.), but that charter
schools and their operators are persons subject to suit under that
law, and were not exempt “merely because such schools are
deemed part of the public school system.” (Wells, at p. 1179.)
While the Legislature did not intend to undermine the school
district’s sovereign obligation to provide a free public education
“by exposing public school districts to the harsh monetary
sanctions” of the False Claims Act, “the CSA assigns no similar
sovereign significance to charter schools or their operators.”
(Wells, at p. 1201.) The court also rejected the contention that
the charter school defendants were entitled to the “public entity”
exemption from the unfair competition law. (Id. at pp. 1203-
1204.)
2.     Contentions and Conclusions
       Wells establishes that charter schools are operated “by
distinct outside entities”; the CSA assigns “no . . . sovereign
significance to charter schools or their operators”; and “[e]xcept in
specified respects,” charter schools are exempt from the laws
governing school districts. (Wells, supra, 39 Cal.4th at p. 1201.)
In other words, the Legislature has specified precisely how, and
to what extent, and under which statutory provisions charter
schools are deemed to be part of the system of public schools, or
“deemed to be a ‘school district’ ” (Ed. Code, § 47612, subd. (c)).
Notably absent is any suggestion that charters schools are to be
treated like school districts for taxation purposes.




                                 8
       Nonetheless, plaintiffs contend that “charter schools, like
school districts, are impliedly exempt from property taxes and
special assessments on property used for public education
purposes.” As we observed earlier, this claim is unsupported by
any pertinent legal authority and rests upon an erroneous
reading of the case law on the “implied exemption,” all of which
refers to a public entity’s implied exemption from special
assessments, not from property taxes.
       School districts are not “impliedly exempt” from property
taxes; they are expressly exempt from property taxes under the
Constitution. (Cal. Const., art. XIII, § 3, subd. (b); San Marcos,
supra, 42 Cal.3d at pp. 160-161.) School districts are impliedly
exempt from special assessments, as stated in San Marcos.
(42 Cal.3d at p. 161.) This implied exemption from special
assessments flows from the express constitutional exemption
from property taxation. (Ibid.; East Bay, supra, 130 Cal.App.4th
at p. 1368.)
       Plaintiffs create their claim of an implied exemption from
property taxation by referring to 19th century cases predating
the 1879 express constitutional exemption of government-owned
property from property taxation. (People v. McCreery (1868)
34 Cal. 432; People v. Doe G. 1,034 (1868) 36 Cal. 220. These
cases do not discuss an “implied exemption” from property taxes,
nor do they involve special assessments. These cases simply
point out the “meaning of taxation” and refer to the “absurdity” of
the State taxing itself. (McCreery, at p. 456 [taxes are charges
“levied by the sovereign power upon the property of its subject,”
and “not a charge upon its own property”]; Doe G., at p. 223
[same]; id. at p. 222 [“Revenue is the object of taxation, and none
would result from the State’s taxing its own property.”].) Neither




                                 9
case refers to this principle as an “implied exemption” from
taxation.
       Then, the 1879 Constitution was adopted, and expressly
provided that property belonging to the state or any county, city
or municipal corporation was exempt from taxation. This express
constitutional exemption has existed for 140 years. Plaintiffs’
suggestion that there is also a separate, implied exemption from
taxation, has no legal authority to support it. All the case law
referring to an implied exemption refers to an implied exemption
of publicly owned property from special assessments.3
       The first reference to the “implied exemption” principle in
the cited cases occurred in 1895, and involved an assessment by
an irrigation district on city-owned lands. (San Diego v. Linda
Vista Irrigation Dist. (1895) 108 Cal. 189 (San Diego).)4 All other


3      Plaintiffs erroneously describe a later 19th century case
(Witter v. Mission School District (1898) 121 Cal. 350) as though
it discussed “the implied exemption against any form of the
taxing power.” It did not. Witter involved a statute imposing a
sidewalk assessment that had no exceptions, and concluded that
land belonging to school districts was liable for assessments for
improvements only if it was not used for school purposes. (Id. at
pp. 351-352.)

4      Plaintiffs misrepresent San Diego when they assert that
the court “considered the implied exemption, which applies to
property taxes as well as special assessments.” (Italics added.)
The court said nothing of the sort. The court quoted the
constitutional exemption from property taxes (108 Cal. at p. 192),
observed that an assessment was not a tax (id. at p. 193), said
there was “no express exemption of any property from local
assessments” (id. at p. 194, second italics added), and concluded
that “implied exemptions [from local assessments] should not be


                                10
discussions of an “implied exemption” refer to an implied
exemption from special assessments. (San Marcos, supra,
42 Cal.3d at p. 161; Inglewood, supra, 207 Cal. at pp. 703-704;
East Bay, supra, 130 Cal.App.4th at pp. 1368-1369.)
       In short, all plaintiffs’ contentions about an implied
exemption from property taxation are entirely inapt.
       That leaves us with the contention that requiring plaintiffs
to pay the challenged taxes and assessments “violates . . .
legislative intent under the CSA.” For the most part, this
argument relies on the unfounded claims about the implied
exemption doctrine, and to that extent requires no further
discussion. The substance of the claim is that the CSA’s express
mandate that charter schools are to receive the same per-student
funding as school districts should be construed to require charter
schools to be exempt from taxation and special assessments to
the same extent as school districts. There is no legal authority
for that conclusion.
       Plaintiffs correctly point out that charter schools are
treated as public school districts for some purposes but not for
others. But those purposes—funding and academics—are
specified in the CSA, and nothing in the CSA suggests that
charter schools are to be treated as public school districts for
taxation purposes. The pertinent case authorities involve claims
that a charter school should be treated like a school district for
purposes of some other statute, such as the False Claims Act in
Wells. And in those cases, the charter school was not treated as a
school district.



extended to property which is not held or used for municipal or
governmental purposes” (id. at p. 196).


                                11
       For example, plaintiffs cite Gateway Community Charters
v. Spiess (2017) 9 Cal.App.5th 499. There, the court held a
charter school was not an “other municipal corporation” under
Labor Code section 220, subdivision (b), which exempts such
corporations from certain Labor Code provisions, including
payment of waiting time penalties. (Gateway, at pp. 507-508.)
Gateway rejected the charter school’s claim it should be exempt
from the penalties because those penalties would reduce the
funds available to educate. (Id. at p. 508.) “Such policy
arguments are best left to the Legislature to decide. [Citation.]
Our role is merely to interpret the statute as written, not to
establish policy. [Citation.] If the Legislature desires to exempt
charter schools from the waiting time penalties, it can do so.”
(Ibid.; see also Knapp v. Palisades Charter High School (2007)
146 Cal.App.4th 708, 710 [charter school is not a “public entity”
under the Government Claims Act].)
       In short, there is no doubt that charter schools “are eligible
equally with other public schools for a share of state and local
education funding.” (Today’s Fresh Start, Inc. v. Los Angeles
County Office of Education (2013) 57 Cal.4th 197, 206.) That is
because the CSA says so. But it would be a leap of major
proportions to conclude that the Legislature’s intent to provide
charter schools with equal operational funding to that of school
districts (Ed. Code, § 47630) somehow means charter schools are
entitled to a public entity’s exemption from taxation and its
implied exemption from special assessments. We see no basis for
reaching that conclusion.
       Plaintiffs say we should not rely on cases like Wells and
Gateway because they involve “wrongdoing” by charter schools.
We do not see what that has to do with the principles applied in




                                 12
those cases. The cases do not in any event support the
proposition that charter schools should be treated as school
districts for taxation purposes.
        Finally, the law is clear that “public benefit corporations
are not public entities.” (Hagman v. Meher Mount Corp. (2013)
215 Cal.App.4th 82, 88.) That term—public entities—“is defined
. . . throughout the California codes,” and “[i]n every instance, the
entities listed as public entities—from traditional bodies like
counties and cities to more recent innovations like public
authorities and public corporations—have one thing in common:
Each is vested with some degree of sovereignty.” (Ibid.) A
charter school has no sovereign authority, as plaintiffs
necessarily concede. That being so, the charter school’s property
is not exempt from property taxation under the constitutional
exemption for property owned by the State or a local government,
nor is such property impliedly exempt from special assessments.
                            DISPOSITION
        The judgment is affirmed. Defendants shall recover their
costs on appeal.

                                      GRIMES, J.

      WE CONCUR:
                         BIGELOW, P. J.



                         WILEY, J.




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