Russell City Energy Co. v. City of Hayward

*56The "Payments Clause" of an agreement between Russell City Energy Company, LLC (Russell) and the City of Hayward (City)

*57prohibited the City from imposing any taxes on the "development, construction, ownership and operation" of Russell's power plant except taxes tethered to ownership of real property. The question in this case is whether Russell's interpretation of the Payments Clause violates article XIII, section 31 of the California Constitution (Section 31) which provides "[t]he power to tax may not be surrendered or suspended by grant or contract."

*167The answer is yes. We conclude Russell's…