Second Appellate District Rules that Charge for “Single-Use” Bags is not a Tax, Does Not Require Voter Approval

In a decision addressing changes to the California Constitution approved by Proposition 26 (2010), the Second District Court of Appeal ruled on February 21, 2013 that a 10-cent per bag charge for recyclable paper bags, as part of a comprehensive plan to limit the use of “single-use” or “disposable” bags, is not a tax that requires voter approval.

Under the definition added by Proposition 26, a local tax requiring voter approval means “any levy, charge, or exaction of any kind imposed by a local government,” subject to seven exceptions.

The fee at issue in Schmeer v. County of Los Angeles (No. B240592. Second Dist., Div. Three. Feb. 21, 2013) was one part of a set of regulations requires stores to charge 10 cents for each recyclable paper bag provided by a store. Stores retain the funds collected, to be used to cover the costs of compliance, the costs of providing the bags, and the costs of educational materials and of promoting the use of reusable bags.

Based on the characteristics of the exceptions included in Proposition 26 and the general nature of taxation, the court inferred that, to be a tax, a charge must result in revenue to the government entity that imposes the charge. Since stores retain the revenue from the 10-cent-per-bag charge, the court concluded that the charge is not a “tax”, and the voter approval requirement does not apply.