BILL ANALYSIS Ó
AB 43
Page 1
Date of Hearing: April 22, 2013
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Raul Bocanegra, Chair
AB 43 (Bocanegra) - As Amended: March 19, 2013
Majority vote. Fiscal committee.
SUBJECT : Property taxation: refund actions
SUMMARY : Requires the court to issue a written statement of
decision or order in all actions or proceedings for judicial
review when remanding a property tax matter to the county board
of equalization (county board). Specifically, this bill
requires the statement of decision to include the factual and
legal basis for the court's decision as to each of the material
controversial issues and include instructions on remand to the
county board.
EXISTING LAW :
1)States that a county board of supervisors or assessment
appeals board, for property tax purposes, shall equalize the
value of properties on the local assessment roll by adjusting
individual assessments. (California Constitution Article XIII,
Section 16).
2)Provides that a county board or an assessment appeals board
must hear and decide appeal applications within two years of
the application filing. [Revenue & Taxation Code (R&TC)
Section 1604].
3)Allows an assessor to seek review of an adverse county board
decision within six months of the final determination. [Plaza
Hollister Ltd. Partnership v. County of San Benito (1999) 72
Cal.App. 4th 1 and R&TC Section 1615].
4)Requires a taxpayer to exhaust administrative remedies before
bringing an action in the Superior Court. The refund action
must be filed within six months of the county board's denial
of a claim for refund. (R&TC Section 5140 and 5141).
5)Provides that a party to the case can request the court to
prepare a statement of decision. (California Code of Civil
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Procedure Section 632 and California Rule of Court, 3.1590).
FISCAL EFFECT : None.
COMMENTS :
1)The author provides the following statement in support of this
bill:
AB 43 reduces administrative and judicial costs by
requiring a court to provide clearer guidance when
remanding a tax matter to a county board for further
proceedings. After a court hears a case, a statement of
decision is often issued. However, the county board does
not always receive explicit instructions regarding what
actions are necessary to move forward. This may cause
uncertainty as to the scope of the remand. As a result,
the county board may duplicate hearings even though only a
single issue needed to be addressed on remand. On the
other hand, a county board may too narrowly limit the
remanded proceedings, leading to a denial of due process
and additional litigation at the Superior Court level.
This waste of judicial and county resources could be
prevented with additional information.
Making matters worse, the members of a county board
generally have no legal training and are often unable to
find the right course of action when a case has been
remanded. Although the discretion that a county board has
in providing the appropriate scope of the remand is set out
in case law, attorneys working for the county board do not
generally practice exclusively in the area of property tax.
As a result, there is often a lot of discussion as to the
appropriate scope of the remand. This wasteful use of
judicial resources can be prevented if remand orders
contained additional guidance.
2)Proponents of this measure state:
When a court issues an order remanding a property tax
matter to a county board, there often is uncertainty as to
the scope of the remand proceedings. This is especially
true when the remanding court does not provide a clear
statement of decision or other appropriate information in
its remand order. As it stands today, any party (plaintiff
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or defendant) can request that the Superior Court prepare a
Statement of Decision in a case, and presumably the parties
would do so in property tax cases (the right to request a
Statement of Decision is in Code of Civil Procedure Section
632 and California Rule of Court 3.1590).
AB 43 will ensure that when the Superior Court writes a
Statement of Decision in a property tax case, and the
Superior Court has decided to remand the case back to the
Assessment Appeals Board, the information needed by the
Assessment Appeals Board will be included in the Statement
of Decision. Superior Court judges already are required to
write Statements of Decision, so there should not be any
additional work for the judicial system, only a proviso
that Superior Court judges write their Statements of
Decision to include the information needed by the
Assessment Appeals Boards.
3)Background . A county board is an independent entity whose
function is to resolve disputes between the county assessor
and taxpayers over values of locally assessed property. It is
a quasi-judicial body and the decisions of the county board
are legally binding and enforceable. [Los Angeles Gas and
Electric Co. v. County of Los Angeles (1912) 162 Cal. 164.] A
person who disagrees with the county board's decision may seek
review in Superior Court. In reviewing a county board's
determination, the Superior Court is limited to applying
either the substantial evidence rule or a de novo review. The
court's review of a county board's factual determinations is
governed by the substantial evidence rule, and may not be set
aside unless they are arbitrary, in excess of discretion, or
contrary to standards prescribed by law. [County of San Diego
v. Assessment Appeals Bd. No. 2 (1983) 148 Cal.App. 3d 548].
Issues of law are subject to de novo review. [Georgia Pacific
Corp. v County of Butte (1974) 37 Cal.App. 3d 461]. When a
court overturns a county board's determination, the court will
remand the matter so that the county board can properly
determine the property's value.
4)How broad is a hearing on remand ? A court, in providing a
remand order, does not always specify the appropriate scope of
the remanded proceedings. When such instructions are not
provided, a county board has the discretion to limit the scope
of the hearing in any manner that is consistent with the
notions of fairness, procedural, and substantive due process.
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[Universal Consolidated Oil v. Byram (1944) 25 Cal. 2d 353,
and Prudential Ins. v. City and County of San Francisco (1987)
191 Cal.App. 3d 1142]. Property tax matters are not always
well understood, and because members of the county board and
attorneys in the case do not always practice exclusively in
the area of property tax law, a county board may not always be
able to determine the appropriate scope of the remanded
proceedings. As such, the scope of the remanded hearing may
be too narrow or too broad, each creating its own unique
problems. If the hearing on remand is too narrow, a party may
not be able to properly defend its case, which could lead to a
denial of due process. On the other hand, if the scope is too
broad the proceedings may favor one party over another. Such
proceedings also place a burden on the entire system. As a
result, a party may have to re-defend and re-litigate an issue
that has already been decided.
5)Statement of Decision . Parties in a case will generally
request a statement of decision for a remand order. However,
statements of decision do not always specify the scope of
remand and sometimes lack pertinent information. The issue,
therefore, is the need for additional guidance. The
provisions of this bill require that a statement of decision
be issued whenever a reviewing court remands a property tax
matter to the county board. It also requires that the
statement of decision contain the factual and legal basis for
the court's decision as to each of the material controversial
issues and include instructions for remand to the county
board . Pertinent information about the scope of the remand
order will, therefore, be included in the statement of
decision, giving greater guidance to the county boards.
6)Proposed Amendments .
Replace the term "controversial" with "controverted" on page
2, line 8, to conform with California Code of Civil Procedure
Section 632.
REGISTERED SUPPORT / OPPOSITION :
Support
California Taxpayers Association
California Chamber of Commerce
AB 43
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Opposition
None
Analysis Prepared by : Carlos Anguiano / REV. & TAX. / (916)
319-2098