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  • CITY AND COUNTY OF SAN FRANCISCO VS. REGENTS OF THE UNIVERSITY OF CALIFORNIA WRITS OF MANDATE OR PROH., CERTI., ETC./ADMIN. AGEN document preview
  • CITY AND COUNTY OF SAN FRANCISCO VS. REGENTS OF THE UNIVERSITY OF CALIFORNIA WRITS OF MANDATE OR PROH., CERTI., ETC./ADMIN. AGEN document preview
  • CITY AND COUNTY OF SAN FRANCISCO VS. REGENTS OF THE UNIVERSITY OF CALIFORNIA WRITS OF MANDATE OR PROH., CERTI., ETC./ADMIN. AGEN document preview
  • CITY AND COUNTY OF SAN FRANCISCO VS. REGENTS OF THE UNIVERSITY OF CALIFORNIA WRITS OF MANDATE OR PROH., CERTI., ETC./ADMIN. AGEN document preview
  • CITY AND COUNTY OF SAN FRANCISCO VS. REGENTS OF THE UNIVERSITY OF CALIFORNIA WRITS OF MANDATE OR PROH., CERTI., ETC./ADMIN. AGEN document preview
  • CITY AND COUNTY OF SAN FRANCISCO VS. REGENTS OF THE UNIVERSITY OF CALIFORNIA WRITS OF MANDATE OR PROH., CERTI., ETC./ADMIN. AGEN document preview
  • CITY AND COUNTY OF SAN FRANCISCO VS. REGENTS OF THE UNIVERSITY OF CALIFORNIA WRITS OF MANDATE OR PROH., CERTI., ETC./ADMIN. AGEN document preview
  • CITY AND COUNTY OF SAN FRANCISCO VS. REGENTS OF THE UNIVERSITY OF CALIFORNIA WRITS OF MANDATE OR PROH., CERTI., ETC./ADMIN. AGEN document preview
						
                                

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1 DENNIS J. HERRERA, State Bar #139669 City Attorney 2 SCOTT M. REIBER, State Bar #245418 ELECTRONICALLY Chief Tax Attorney F I L E D 3 PETER J. KEITH, State Bar #206482 Superior Court of California, County of San Francisco Chief Attorney, Neighborhood 4 and Residential Safety Division 10/28/2019 1390 Market Street, Sixth Floor Clerk of the Court BY: RONNIE OTERO 5 San Francisco, California 94102-5408 Deputy Clerk Telephone: (415) 554-3908 6 Facsimile: (415) 437-4644 E-Mail: peter.keith@sfcityatty.org 7 Attorneys for Plaintiff and Petitioner 8 CITY AND COUNTY OF SAN FRANCISCO 9 SUPERIOR COURT OF THE STATE OF CALIFORNIA 10 COUNTY OF SAN FRANCISCO 11 UNLIMITED JURISDICTION 12 CITY AND COUNTY OF SAN Case No. CPF-14-513434 13 FRANCISCO, acting by and through its Office of Treasurer and Tax Collector, DECLARATION OF PETER J. KEITH IN 14 SUPPORT OF PLAINTIFF AND PETITIONER Plaintiff and Petitioner, CITY AND COUNTY OF SAN FRANCISCO’S 15 OPPOSITION TO DEFENDANTS’ AND vs. RESPONDENTS’ APPLICATION FOR 16 COMPLEX DESIGNATION; EXHIBITS A-C REGENTS OF THE UNIVERSITY OF 17 CALIFORNIA; JOHN PLOTTS, in his official Place: Dept. 304 capacity as the Senior Vice Chancellor of 18 Finance & Administration at University of Date Action Filed: January 14, 2014 California San Francisco; BOARD OF Remittitur Issued: July 31, 2019 19 DIRECTORS OF HASTINGS COLLEGE OF THE LAW; DAVID SEWARD, in his official 20 capacity as Chief Financial Officer at University of California Hastings College of 21 the Law; THE BOARD OF TRUSTEES OF THE CALIFORNIA STATE UNIVERSITY; 22 RONALD CORTEZ, in his official capacity as the Vice President and CFO for Administration 23 and Finance at San Francisco State University; and DOES 1 - 35, 24 Defendants and Respondents. 25 26 27 I, PETER J. KEITH, declare as follows: 28 1 DECL KEITH ISO OPP DEF APPL COMPLEX DESIG, CASE CPF-14-513434 n:\taxlit\li2019\140765\01401328.docx 1 1. I am an attorney duly sworn to practice law in the State of California. I am over the age 2 of eighteen. I have personal knowledge of the following facts except for those stated on information 3 and belief. As to those facts, I believe them to be true. If called upon to testify, I could and would 4 testify competently to the contents of this declaration. 5 2. I have been practicing law as a Deputy City Attorney in the San Francisco City 6 Attorney’s Office since September 2000. In the present case, the City Attorney’s Office is counsel of 7 record for Plaintiff-Petitioner City and County of San Francisco, and I have been the Deputy City 8 Attorney primarily responsible for the case. I argued the case in Superior Court, the Court of Appeal, 9 and the California Supreme Court. 10 3. Attached hereto as Exhibit A is a true and correct copy of the decision of the California 11 Supreme Court in City & County of San Francisco v. Regents of the Univ. of Cal., et al., Case No. 12 S242835, filed on June 20, 2019. 13 4. A declaration from the Regents’ finance officer Kevin Cox stated that as of FY 2013 – 14 before the UCSF Mission Bay campus added another thousand-plus parking spots – UCSF parking 15 revenue exceeded $17 million. A true and correct copy of excerpts from his declaration, with markings 16 in the margin to indicate the relevant testimony, is attached as Exhibit B. 17 5. Following the Supreme Court’s decision, I and the San Francisco Tax Collector’s 18 Office reached out to the universities and their counsel and offered to work with them so the 19 universities could comply with their duties as stated by the Supreme Court, and commence collecting 20 and remitting parking tax. And to formally conclude the case, I requested on behalf of San Francisco 21 that the universities stipulate to entry of a judgment and issuance of the writ consistent with the 22 Supreme Court’s ruling. The universities declined to cooperate with San Francisco or to concede 23 defeat. Instead, they stated their intention to continue litigating the validity of the parking tax, with 24 both old arguments and new arguments against the tax that they failed to present in 2014. And in the 25 meantime, they would refuse to collect and remit the tax. 26 6. Given this stalemate, San Francisco filed in Department 302 a “Motion for Entry of 27 Amended Judgment after Remittitur from the California Supreme Court.” A true and correct copy of 28 the Notice of Motion and Points & Authorities is attached as Exhibit C to this Declaration. 2 DECL KEITH ISO OPP DEF APPL COMPLEX DESIG, CASE CPF-14-513434 n:\taxlit\li2019\140765\01401328.docx 1 7. San Francisco originally set its motion for hearing in Department 302 on October 22. 2 However, when the universities' counsel requested a continuance to November 13, San Francisco 3 stipulated and Department 302 continued to the motion to that date. 4 I declare under penalty of perjury under the laws of the State of California that the foregoing is 5 true and correct: Executed this 28th of October 2019, at San Francisco, California. 6 7 8 PETER J. KEITH 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DECL KEITH ISO OPP DEF APPL COMPLEX DESIG, CASE CPF-14-513434 n:\taxlit\li2019\140765\01401328.docx 1 INDEX TO EXHIBITS 2 Exhibit Description 3 A California Supreme Court Opinion, City & County ofSan Francisco v. Regents of 4 the Univ. of Cal., et al., Case No. S242835 (June 20, 2019) · 5 B Excerpts dated March 11, 2014, from Declaration of Kevin Cox in Support of Respondent The Regents of the University of California's Memorandum of Points 6 and Authorities in Opposition to First Amended Verified Petition for Writ of Mandate 7 C Plaintiff City and County of San Francisco's Notice of Motion and Motion For 8 Entry of Amended Judgment After Remittitur From the California Supreme Court dated September 25, 2019; Plaintiff City and County of San Francisco's 9 Memorandum of Points and Authorities In Support of Motion For Entry of Amended Judgment After Remittitur From the California Supreme Court dated 10 September 24, 2019 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DECL KEITH ISO OPP DEF APPL COMPLEX DESIG, CASE CPF-14-513434 n:\taxlit\li2019\140765\01401328.docx EXHIBIT A IN THE SUPREME COURT OF CALIFORNIA CITY AND COUNTY OF SAN FRANCISCO, Plaintiff and Appellant, v. THE REGENTS OF THE UNIVERSITY OF CALIFORNIA et al., Defendants and Respondents. S242835 First Appellate District, Division One A144500 San Francisco City and County Superior Court CPF-14-513-434 June 20, 2019 Justice Kruger authored the opinion of the court, in which Chief Justice Cantil-Sakauye and Justices Chin, Corrigan, Liu, Cuéllar, and Baker* concurred. * Associate Justice of the Court of Appeal, Second Appellate District, Division Five, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution. CITY AND COUNTY OF SAN FRANCISCO v. THE REGENTS OF THE UNIVERSITY OF CALIFORNIA S242835 Opinion of the Court by Kruger, J. The City and County of San Francisco (San Francisco) imposes a tax on drivers who park their cars in paid parking lots. To enforce the tax, the city requires parking lot operators to collect the tax from drivers and remit the proceeds to the city. We granted review to consider whether the California Constitution permits San Francisco to apply this tax collection requirement to state universities that operate paid parking lots in the city. We conclude the answer is yes. I. San Francisco is a consolidated city and county that has adopted a charter for its own governance under article XI, section 3 of the California Constitution. Exercising its constitutional power to regulate its “municipal affairs” as a charter city (Cal. Const., art. XI, § 5, subd. (a)), in the early 1970’s San Francisco enacted a tax on the cost of “rent” for any parking space at a parking lot or garage in the city. (S.F. Bus. & Tax Regs. Code, art. 9, § 601.) Since 1980, the parking tax rate has been set at 25%. (Id., § 602.5.) The San Francisco parking tax is imposed on drivers. But like many taxes of its kind, the parking tax is not paid directly to the city; drivers instead pay the parking tax to the parking lot operator, along with the parking fee the operator charges. The operator then collects the taxes and remits them to the city. (S.F. Bus. & Tax Regs. Code, art. 9, § 603.) To ensure it receives the proper amounts, San Francisco CITY AND COUNTY OF SAN FRANCISCO v. THE REGENTS OF THE UNIVERSITY OF CALIFORNIA Opinion of the Court by Kruger, J. requires operators to document the taxes they collect and holds them liable for any underpayments.1 By its terms, the ordinance applies to public entities and private ones alike, though it does excuse public entity operators from some of the requirements imposed on private parking operators, such as 1 To be more specific: The ordinance generally requires the operator to file quarterly tax returns that document the amount of the parking tax to be remitted, and such other information as the city may require. (S.F. Bus. & Tax Regs. Code, art. 6, § 6.7-2, subd. (c).) The operator must also certify in writing, under penalty of perjury, that it has utilized machines that record all parking transactions to the city’s specifications. (Id., art. 9, § 607, subd. (b); id., art. 22, § 2203.) If an operator does not collect the tax from drivers renting parking space in its facilities, the operator becomes liable to the city for the amount of the tax. (S.F. Bus. & Tax Regs. Code, art. 9, § 604, subd. (a).) The city will excuse the operator from remitting tax on a small percentage of lost or unaccounted-for tickets, but operators are otherwise generally liable for the full value of the highest maximum daily rate charged for any lost or unaccounted-for ticket. (Id., subd. (b).) The city may consider “in its sole and absolute discretion” whether an operator’s explanation for lost tickets or canceled transactions is reasonable. (Id., subd. (c).) The operators’ compliance with these requirements is backed by the threat of more significant sanctions. Under San Francisco law, operators must post a bond and obtain a certificate of authority in order to operate a parking lot. (S.F. Bus. & Tax Regs. Code, art. 6, § 6.6-1.) If an operator violates any city rule or regulation related to the parking tax, “including but not limited to any failure to timely collect, report, pay, or remit any tax imposed by this Code, failure to maintain accurate registration information, failure to sign any return or pay any tax when due, or failure to timely respond to any request for information,” then the operator’s certificate of authority may be suspended or revoked. (Id., subd. (g).) 2 CITY AND COUNTY OF SAN FRANCISCO v. THE REGENTS OF THE UNIVERSITY OF CALIFORNIA Opinion of the Court by Kruger, J. bonding and permitting requirements (S.F. Bus. & Tax Regs. Code, art. 6, § 6.6-1, subd. (h)(2); S.F. Police Code, art. 17, § 1215, subd. (b)), and requirements for installing devices to properly track parking revenue and taxes (S.F. Bus. & Tax Regs. Code, art. 22, § 2202). But public entities are still required to “collect, report, and remit” the parking tax owed by drivers to the city (S.F. Bus. & Tax Regs. Code, art. 6, § 6.8-1, subd. (b)). It is this requirement that has generated the present controversy. Defendants are the Regents of the University of California (Regents), which oversees the University of California at San Francisco (UCSF); the Board of Directors of Hastings College of the Law (Hastings); and the Board of Trustees of the California State University (CSU), which operates San Francisco State University (SFSU) (collectively, the universities). All of the university defendants own and operate private parking facilities in San Francisco in order to serve the needs of their respective campuses. Specifically, the Regents own and operate parking facilities at UCSF’s educational and healthcare facilities for the use of faculty, staff, students, researchers, visitors, and patients who receive care at the clinics and hospitals on campus. UCSF uses its parking fee revenue to fund, among other things, a shuttle bus service between its various locations for students, faculty, and staff. Hastings operates a garage near its law school, which is located in the Tenderloin neighborhood of San Francisco. Hastings explains that it operates the garage at a loss in order to maintain a safe and secure environment for its students. CSU, for its part, operates nine parking lots on SFSU’s campus, which is located in an urban environment where parking is scarce. 3 CITY AND COUNTY OF SAN FRANCISCO v. THE REGENTS OF THE UNIVERSITY OF CALIFORNIA Opinion of the Court by Kruger, J. In 1983, San Francisco attempted to collect parking lot taxes from UCSF, but the Regents asserted immunity and San Francisco declined to pursue the matter. That was, for quite some time, the end of the controversy. But in 2011, San Francisco reconsidered and directed UCSF, Hastings, and SFSU to begin collecting and remitting the parking tax. The universities refused. In response, San Francisco filed a petition for a writ of mandate in the trial court to compel compliance. San Francisco argued that it would be a minimal burden for the universities to collect the parking tax along with whatever parking fees they charge. San Francisco also offered to reimburse the universities for their administrative costs in collecting and remitting the taxes, as the trial court had ordered in another municipal tax collection case, City of Modesto v. Modesto Irrigation Dist. (1973) 34 Cal.App.3d 504, 508–509 (City of Modesto). The trial court denied the writ, concluding that the universities are exempt from compliance with the parking tax ordinance. The trial court reasoned that this result followed from the constitutional principles articulated and applied in In re Means (1939) 14 Cal.2d 254 (Means) and Hall v. City of Taft (1956) 47 Cal.2d 177 (Hall), which hold that a local government may not regulate a state entity in its performance of governmental functions unless the state consents to the regulation. The Court of Appeal affirmed in a published opinion, agreeing with the trial court that the Means-Hall doctrine exempts the state agencies from collecting and remitting the parking tax. (City and County of San Francisco v. Regents of University of California (2017) 11 Cal.App.5th 1107 (City and County of San Francisco).) Justice Banke dissented. In her view, the state’s sovereignty is “not impinged” (City and County of San Francisco, supra, 11 Cal.App.5th at p. 1149 (dis. opn. of Banke, J.)) by the “minimal 4 CITY AND COUNTY OF SAN FRANCISCO v. THE REGENTS OF THE UNIVERSITY OF CALIFORNIA Opinion of the Court by Kruger, J. burden” (ibid.) of “collecting a general local tax imposed on third parties, particularly where the costs of such are reimbursed” (id. at p. 1146). She also observed that other authorities have, contrary to the majority’s holding, concluded that a municipality may require a state entity to collect a general tax imposed on third parties doing business with the entity, at least where the municipality reimburses the state entity for the costs of collection. (See City of Modesto, supra, 34 Cal.App.3d 504 [charter city could require state agency operating as utility to collect utility user’s tax]; Eastern Mun. Water Dist. v. City of Moreno Valley (1994) 31 Cal.App.4th 24, 26 (City of Moreno Valley) [relying on City of Modesto to conclude general law city could require state agency operating as utility to collect utility user’s tax]; accord, 65 Ops.Cal.Atty.Gen. 267 (1982) [relying on City of Modesto to conclude municipality may require state agency to collect local occupancy tax from private users of state conference center].) While the law on the subject “has been far from a paragon of clarity,” she argued, the majority’s decision left the law “in some disarray.” (City and County of San Francisco, at p. 1124 (dis. opn. of Banke, J.).) She called on this court to “state clearly whether or not a state entity can be asked to collect a local tax imposed on third parties doing business with the entity, particularly where ... the entity will be reimbursed its costs of doing so.” (Ibid.) Hearing the call, we granted review. II. The general problem in this case is familiar to any constitutional system in which two governments exercise authority within the same territory. The specific task before us is to determine the proper allocation of authority between a local government and state agencies under a constitution that confers substantial powers on each. 5 CITY AND COUNTY OF SAN FRANCISCO v. THE REGENTS OF THE UNIVERSITY OF CALIFORNIA Opinion of the Court by Kruger, J. Many of California’s local governments predate California’s statehood, and the framers of the 1879 California Constitution dedicated an entire article to the subject of their powers. From the outset, the 1879 Constitution expressly recognized the police powers of local government, and continues to do so today: As relevant here, any city “may make and enforce within its limits all local, police, sanitary, and other ordinances and regulations not in conflict with general laws.” (Cal. Const., art. XI, § 7.) The 1879 Constitution also permitted cities of a certain size to adopt charters for their own government. (Weekes v. City of Oakland (1978) 21 Cal.3d 386, 399 (Weekes), citing Cal. Const., art. XI, §§ 6, 8 (1879).) In 1896, voters approved a so-called “home rule” provision granting charter cities “supremacy over local matters.” (Weekes, at p. 399.) This provision, as presently written, permits charter cities to “make and enforce all ordinances and regulations in respect to municipal affairs”; with respect to such matters, the cities’ charters “supersede all laws inconsistent therewith.” (Cal. Const., art. XI, § 5, subd. (a).)2 2 Charter counties also enjoy home rule authority. (See Cal. Const., art. XI, §3 [County charters “shall supersede ... all laws inconsistent therewith.”].) This authority, however, is more limited than that of charter cities; the Constitution contains no provision giving charter counties supreme authority over “ ‘county affairs.’ ” (Dibb v. County of San Diego (1994) 8 Cal.4th 1200, 1207–1208.) San Francisco, as California’s only consolidated city and county, enjoys the greater degree of autonomy that comes with charter city status. (Cal. Const., art. XI, § 6, subd. (b).) 6 CITY AND COUNTY OF SAN FRANCISCO v. THE REGENTS OF THE UNIVERSITY OF CALIFORNIA Opinion of the Court by Kruger, J. This home rule authority includes the power to tax for local purposes.3 The power to tax, we have explained, is the lifeblood of the charter city; without it, “the municipality cannot exist, and the municipality alone is directly concerned in its preservation.” (Ex parte Braun (1903) 141 Cal. 204, 210.) It is this local taxation power that San Francisco, a charter city, asserts here. The universities in this case are agencies of the state government whose powers and responsibilities are defined in the Constitution, as well as in statutory law enacted by the Legislature. The Constitution itself establishes the University of California, vesting the Regents with “full powers of organization and government” (Cal. Const., art. IX, § 9, subd. (a)), including “the legal title and the management and disposition of the property of the university and of property held for its benefit” (id., subd. (f)), and “all the powers necessary or convenient for the effective administration of [the University of California]” (ibid.). Hastings is statutorily designated as the law department of the University of California (Ed. Code, § 92201), and is charged with “afford[ing] facilities for the acquisition of legal learning in all branches of the law” (id., § 92202). The CSU system, too, finds explicit mention in the California Constitution, which refers to the Legislature’s authority to create a “state agency ... in the field of public higher education which is charged with the management, administration, and control of the 3 By statute, the Legislature has conferred a parallel taxation power on “general law” cities—that is, cities that have not adopted a charter under article XI, section 3 of the California Constitution. (Gov. Code, § 37100.5.) We do not consider today whether this power is coincident with charter cities’ constitutional authority. 7 CITY AND COUNTY OF SAN FRANCISCO v. THE REGENTS OF THE UNIVERSITY OF CALIFORNIA Opinion of the Court by Kruger, J. State College System of California.” (Cal. Const., art. XX, § 23.) Exercising that authority, the Legislature has conferred on CSU a variety of powers, including the power “to acquire ... real property and to construct, operate, and maintain motor vehicle parking facilities and other transportation facilities thereon for state university officers, employees, students, or other persons.” (Ed. Code, § 89701, subd. (a); see generally id., §§ 66600 et seq., 89000 et seq.) The Board of Trustees may also prescribe the “terms and conditions of the parking, ... including the payment of parking fees” (id., § 89701, subd. (a)), which it has done through regulation (Cal. Code Regs., tit. 5, § 42201). San Francisco contends that its power to raise municipal revenue through taxation permits it to apply its tax ordinance to paid university parking lots within San Francisco borders, just as it applies the ordinance to other paid parking lots operated by private entities. The universities, on the other hand, argue that their status as agencies of the sovereign state government, engaged in duties assigned to them by state law and addressing matters of statewide importance, places private parties’ use of their paid parking lots beyond the reach of San Francisco’s revenue power. No provision of the state Constitution expressly resolves this controversy; the parties thus rely primarily on inferences from constitutional structure and this court’s precedent resolving other types of intergovernmental conflicts. To answer the question, we must disentangle two separate threads of the inquiry. First, does San Francisco have the power to tax drivers who use paid university parking lots? Second, if so, may San Francisco enlist the universities’ help in collecting and remitting the taxes? 8 CITY AND COUNTY OF SAN FRANCISCO v. THE REGENTS OF THE UNIVERSITY OF CALIFORNIA Opinion of the Court by Kruger, J. III. We begin with the first issue, which goes to the substantive validity of the parking tax. The answer follows from settled precedent. As we have described it, the tax in question is not imposed on the state universities or their property. It is, rather, imposed on private parties—namely, drivers who use parking lots. This is a critical distinction. Since the days of M’Culloch v. State of Maryland (1819) 17 U.S. 316, it has been understood that the law forbids one government from imposing a tax on another. But it is also understood that the law does not forbid a government from imposing a tax on private third parties who happen to do business with another government (provided, that is, the tax does not discriminate against the parties because they are doing business with the government). (E.g., Weekes, supra, 21 Cal.3d at p. 398, citing Graves v. N. Y. ex rel. O’Keefe (1939) 306 U.S. 466, 486–487 (Graves).) The parking tax here, which applies to drivers in precisely the same way regardless of whether they use the university parking lot or a private parking lot across the street, belongs to this second category of taxes. There is no assertion here that the drivers here stand in the shoes of the universities themselves. Principles of governmental tax immunity do not bar the parking tax. The universities do not take direct aim at this settled understanding of the limits of governmental tax immunity or their application to this case; the primary focus of their challenge to San Francisco’s ordinance is, rather, the requirement that they play a role in collecting and remitting the taxes. Nevertheless, the universities raise a series of objections to San Francisco’s tax ordinance that can only be understood as indirect challenges to San Francisco’s power to impose the parking tax on the third parties who pay for use of 9 CITY AND COUNTY OF SAN FRANCISCO v. THE REGENTS OF THE UNIVERSITY OF CALIFORNIA Opinion of the Court by Kruger, J. university parking lots. CSU, for example, contends that it should not be required to collect the parking tax because parking is of particular importance to the university and the tax threatens to interfere with CSU’s educational mission by making parking more expensive. It explains that parking for SFSU students, staff, and visitors is scarce; adding a parking tax would make it difficult for CSU to ensure parking remains affordable; and CSU would lose revenue if it reduced its parking prices by the amount of the tax. The other universities raise similar concerns about interference with their judgments about how to provide affordable access to their facilities and the downstream impact on their budgets; indeed, Hastings adds that it considers parking so important that it already operates its garage at a loss. Although the universities offer these arguments in service of their arguments for avoiding collection of San Francisco’s parking tax, their true target is plainly the tax itself. If San Francisco’s parking tax ordinance interferes with their judgments about how best to provide affordable access for guests and affiliates, it is because of San Francisco’s chosen tax rate as applied to the third parties who park in university lots, not because of the requirement that parking lot operators collect these taxes along with other parking charges. The answers to this set of objections, however, also follow from settled precedent. Our cases have made clear that a particular private activity may be a matter of particular concern to the state and nonetheless subject to municipal taxation. Even when the state has exclusive regulatory authority in a particular area, a local tax on the conduct of the regulated activity, without more, is not an impermissible “ ‘interference with state affairs.’ ” (In re Groves (1960) 54 Cal.2d 154, 157, quoting In re Galusha (1921) 184 Cal. 697 10 CITY AND COUNTY OF SAN FRANCISCO v. THE REGENTS OF THE UNIVERSITY OF CALIFORNIA Opinion of the Court by Kruger, J. [municipality may tax attorney engaged in practice of law, notwithstanding exclusive state regulation of legal practice].) Our cases have also held that it is permissible for a municipality to tax such private activities even though the tax imposes an indirect economic burden on the state government. General taxes on government employees and contractors are prime examples. In Weekes, supra, 21 Cal.3d 386, for example, this court upheld the application of a municipal occupation tax to state workers notwithstanding the clear, if indirect, impact on the state’s choices regarding employee compensation. Similarly, in City of Los Angeles v. A.E.C. Los Angeles (1973) 33 Cal.App.3d 933 (A.E.C.