Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2014
 

Revenue and Taxation Code

Property Taxation

Part 3. Equalization

Chapter 1. Equalization by County Board of Equalization

Article 1. Generally

Section 1604

1604. Regular equalization period. (a) (1) In counties of the first class, annually, on the fourth Monday in September, the county board shall meet to equalize the assessment of property on the local roll. It shall continue to meet for that purpose, from time to time, until the business of equalization is disposed of.

(2) In all other counties, annually, on the third Monday in July, the county board shall meet to equalize the assessment of property on the local roll. It shall continue to meet for that purpose, from time to time, until the business of equalization is disposed of.

(b) (1) An application for a reduction in an assessment filed pursuant to Section 1603 shall also constitute a sufficient claim for refund, if the applicant states in the application that the application is also intended to constitute a claim for refund pursuant to the provisions of Section 5097.

(2) The county board shall have no power to receive or hear any application for a reduction in an escaped assessment made pursuant to Section 531.1 nor a penal assessment levied in respect thereto, nor to reduce those assessments.

(c) If the county board fails to hear evidence and fails to make a final determination on the application for reduction in assessment of property within two years of the timely filing of the application, the applicant's opinion of value as reflected on the application for reduction in assessment shall be the value upon which taxes are to be levied for the tax year or tax years covered by the application, unless either of the following occurs:

(1) The applicant and the county board mutually agree in writing, or on the record, to an extension of time for the hearing.

(2) The application for reduction is consolidated for hearing with another application by the same applicant with respect to which an extension of time for the hearing has been granted pursuant to paragraph (1). In no case shall the application be consolidated without the applicant's written agreement after the two-year time period has passed or after an extension of the two-year time period previously agreed to by the applicant has expired.

The reduction in assessment reflecting the applicant's opinion of value shall not be made, however, until two years after the close of the filing period during which the timely application was filed. Further, this subdivision shall not apply to applications for reductions in assessments of property where the applicant has failed to provide full and complete information as required by law or where litigation is pending directly relating to the issues involved in the application.

(d) (1) When the applicant's opinion of value, as stated on the application, has been placed on the assessment roll pursuant to subdivision (c), and the application requested a reduction in the base year value of an assessment, the applicant's opinion of value shall remain on the roll until the county board makes a final determination on the application. The value so determined by the county board, plus appropriate adjustments for the inflation factor, shall be entered on the assessment roll for the fiscal year in which the value is determined. No increased or escape taxes other than those required by a purchase, change in ownership, or new construction, or resulting from application of the inflation factor to the applicant's opinion of value shall be levied for the tax years during which the county board failed to act.

(2) When the applicant's opinion of value has been placed on the assessment roll pursuant to subdivision (c) for any application other than an application requesting a reduction in base year value, the applicant's opinion of value shall be enrolled on the assessment roll for the tax year or tax years covered by that application.

(e) The county board shall notify the applicant in writing of any decision by that board not to hold a hearing on his or her application for reduction in assessment within the two-year period specified in subdivision (c). This notice shall also inform the applicant that the applicant's opinion of value as reflected on the application for reduction in assessment shall, as a result of the county board's failure to hold a hearing within the prescribed time period, be the value upon which taxes are to be levied in the absence of the application of either paragraph (1) or (2) of subdivision (c).

History.—Stats. 1966, p. 671 (First Extra Session), in effect October 6, 1966, first operative for the 1967–68 assessment year, substituted "third Monday" for "first Monday" and added "or the assessment appeals board" in the first sentence, deleted the last clause of the second sentence "but not later than the third Monday in July", and added the last paragraph. Stats. 1967, p. 1215, in effect November 8, 1967, added reference to assessment appeals board and third paragraph. Stats. 1969, p. 897, in effect November 10, 1969, substituted "531.1" for "531.5" in the third paragraph. Stats. 1974, Ch. 180, p. 356, in effect April 24, 1974, applicable to assessments made on and after the 1974 lien date, renumbered the section which was formerly numbered 1603; added the subdivision letters; added (a); added "In all other counties," before "annually", substituted "county board" for "boards of supervisors or the assessment appeals board", and deleted "as the county board of equalization" after "meet" in the first sentence, and substituted "to meet" for "in session" in the second sentence of (b); and substituted "1603" for "1607" in the first sentence of the third paragraph. Stats. 1982, Ch. 1465, in effect January 1, 1983, added subdivision (c). Stats. 1986, Ch. 982, effective January 1, 1987, substituted "the" for "said" after "petition" in the second paragraph and substituted "those" for "such" after "nor to reduce" in the third paragraph of subdivision (b); added "and fails to make a final determination" after "evidence" and substituted "shall be the value upon which taxes are to be levied for the tax year covered by the application" for "pursuant to subdivision (a) of Section 1603 shall prevail as the basis upon which taxes are to be levied" after "assessment" in the first sentence, added the second sentence, and substituted "Further" for "However" before ", this" in the third sentence of subdivision (c); and added subdivision (d). Stats. 1991, Ch. 532, in effect January 1, 1992, added "either of the following occurs:" after "unless" in the first sentence, created subparagraph (1) from the former second phrase of the first sentence, and added subparagraph (2) in the first paragraph of subdivision (c). Stats. 1992, Ch. 523, in effect January 1, 1993, added ", or on the record," after "writing" in paragraph (1) of subdivision (c). Stats. 1995, Ch. 498, in effect January 1, 1996, added second sentence to paragraph (2) of subdivision (c) and added subdivision (e). Stats. 2004, Ch. 768 (AB 2857), in effect January 1, 2005, designated former subdivision (a) as paragraph (1) of subdivision (a) and numbered the first paragraph of former subdivision (b) as paragraph (2) thereof; numbered the former second paragraph of subdivision (b) as paragraph (1) of subdivision (b), deleted "and a proportionate reduction or refund of the taxes extended thereon" after "in an assessment" and deleted "or Section 5097" after "Section 1603" in the first sentence therein, added the second sentence, and numbered the former third paragraph as paragraph (2); and numbered the first paragraph of subdivision (d) as paragraph (1) and substituted "When the applicant's opinion of value * * * the applicant's opinion of value" for "If pursuant to subdivision (c), the applicant's opinion of value has been placed in the assessment roll, that" before "value shall remain" in the first sentence therein and added paragraph (2). Stats. 2010, Ch. 654 (SB 1494), in effect January 1, 2011, substituted "It" for "The Board" before "shall continue" in the second sentence of paragraph (1) of subdivision (a); deleted the former first sentence which provided "Any taxpayer may petition the board for a reduction in an assessment by filing an application pursuant to Section 1603.", added "filed pursuant to Section 1603" after "an assessment" in the former second sentence of paragraph (1), and substituted "application" for "petition" after "hear any" in the first sentence of paragraph (2) of subdivision (b); deleted "assessment appeals" after "the county", substituted "applicant's opinion of value" for "taxpayer's opinion of market value" after "application, the" and added "or tax years" after "tax year" in the first sentence of the first paragraph, substituted "applicant" for "taxpayer" after "The" and deleted "assessment appeals" after "the county" in the first sentence of paragraph (1), substituted "applicant" for "taxpayer" after "the same" in the first sentence and substituted "applicant's" for "taxpayer's" after "without the" in the second sentence of paragraph (2), substituted "applicant's opinion of value" for "taxpayer's opinion of market value" after "reflecting the", substituted "applicant" for "taxpayer" after "where the" in the second sentence and deleted the third sentence which provided that "This subdivision is only applicable to applications filed on or after January 1, 1983." in the second paragraph of subdivision (c); and deleted "pursuant to subdivision (a) of Section 80" after "an assessment" in the first sentence of paragraph (1) and substituted "requesting a reduction in base year value" for "filed pursuant to subdivision (a) of Section 80" after "an application" in the first sentence of paragraph (2) of subdivision (d); and substituted "applicant's" for taxpayer's" after "that the" in the second sentence of subdivision (e).

Construction.—The purpose of this section is to assure a prompt resolution of applications for reduction in assessment. The section is designed to prevent bureaucratic delay and forestalling of the return of a taxpayer's money, by providing a significant disincentive for a taxing authority to delay resolution of the taxpayer's application. Mission Housing Development Company v. City and County of San Francisco, 59 Cal.App.4th 55.

Assessment made within regular period.—There is no language in sections 1603 or 1605 limiting "regular assessment period" to any specific tax year. More likely, there is a four-month period in every calendar year in which assessments are made in the normal course of events, and as to an assessment made during that period, regardless of the tax year involved, a taxpayer would have until September 15 to file an application for reduction of assessment. Pacific Mutual Life Insurance Company v. Orange County 187, Cal.App.3d 1141.

Determination after two years.—An appeals board was authorized to reinstate an application that had been denied due to nonappearance after the two-year period prescribed by subdivision (c) and the board's purported revocation of the reinstatement was improper. Even though the taxpayer was entitled to hearing and decision on the application, the taxpayer was estopped from claiming the operation and benefit of subdivisions (c) and (d) because the board had reinstated the application on the condition that the taxpayer waive its right to enrollment of its opinion of value and the taxpayer's attorney knowingly misled the board by failing to notify the board that the taxpayer did not consent to the waiver prior to the noticed hearing. Helene Curtis, Inc. v. Los Angeles County Assessment Appeals Boards, 121 Cal.App.4th 29.

Status of boards.—Although composed of the same members, the county board of equalization is a separate constitutional body from the board of supervisors. Napa Savings Bank v. Napa County, 17 Cal.App. 545.

Meetings.—Acts of the board done after the limit of time fixed by this section are valid if done within the period to which the time could have been extended by the State Board of Equalization. (Buswell v. Board of Supervisors, 116 Cal. 351; Whiting Finance Co. v. Hopkins, 199 Cal. 428), but not if done after the expiration of such period. Napa Savings Bank v. Napa County, supra; Henne v. Los Angeles County, 129 Cal. 297. Cf., however, Universal Consolidated Oil Co. v. Byram, 25 Cal.2d 353. Irregularity in the time of meeting of the board of equalization cannot be urged against the validity of an assessment by one who, upon demand made by the assessor, has refused to give under oath a statement of his assessable property, and therefore could not have had his assessment reduced. Modoc County v. Churchill, 75 Cal. 172.

There is a denial of procedural due process of law when an application is heard by less than a majority of the board, Bandini Estate Co. v. Los Angeles County, 28 Cal.App.2d 224, or when the board members refrain from giving proper consideration to the evidence because of a mistaken belief as to the nature of the question presented. Universal Consolidated Oil Co. v. Byram, 25 Cal.2d 353.

However, mere informalities in the proceedings do not invalidate them. La Grange etc., Mining Co. v. Carter, 142 Cal. 560.

Nature of determination by county board.—A determination of assessments by the county board of equalization is quasi-judicial in nature and is res judicata as far as the courts are concerned. Quinn v. Aero Services, Inc., 172 F.2d 157. Where a county board of equalization made a final determination on applications for reduction of assessment within two years by denying them for lack of jurisdiction, the requirements of Section 1604(c) were not met, and the adoption of the applicant's opinions of value was not required. Heavenly Valley v. El Dorado County Board of Equalization, 84 Cal.App.4th 1323.

Refund of taxes.—Unless a taxpayer states in an application for reduction of assessment that the application is intended to constitute a claim for refund, under Section 5097, the taxpayer must file a separate refund within four years of paying the tax. Thus, a claim for refund filed pursuant to Section 5097 on November 19, 1986, was not timely for taxes paid prior to November 19, 1982. Osco Drug, Inc. v. Orange County, 221 Cal.App.3d 189.

Determination after two years.—A county board of equalization, which fails to decide an applicant's application for a reduction of assessment within two years, is bound by the applicant's opinion of the property's market value as reflected on the application. Section 1604(c) is mandatory, not "directory". Shell Western E&P, Inc. v. Lake County, 224 Cal.App.3d 974. Taxpayers' were entitled to have their opinions of value as to their properties, as stated in their applications for reduction of assessment, inserted on the county assessment roll for the tax years 1985–1986 and 1986–1987, during which they awaited a hearing, where the county failed to carry its burden of overcoming the presumption of constitutionality attached to subdivision (c). Mission Housing Development Company v. City and County of San Francisco, 59 Cal.App.4th 55. Taxpayer was entitled to have its opinion of value as to its property, as stated in its 1992 application, inserted on the roll for the tax years 1992–93 through 1998–99, during which it awaited a hearing. If the board fails to act within two years of filing of the application, subdivisions (c) and (d) require that the taxpayers' opinion of value becomes the assessed value, both for the application year and for subsequent years until a final determination is made. Flight Safety International, Inc. v. Assessment Appeals Board, 105 Cal.App.4th 620. A class action alleging that taxpayers who had filed timely applications for reduction of their assessments and whose applications were not finally determined in two years were entitled, under subdivision (c), to have to pay taxes only on the amounts set forth in their applications and to have the assessment rolls reflect those values is not a prohibited class claim for property tax refund. The action would merely result in an order requiring compliance with the subdivision. Bunker v. Orange County, 103 Cal.App.4th 542. Unless the assessment appeals board gives written notice of controlling litigation, the two year period within which an applicant's application for reduction in assessment must be heard is not extended because of pending litigation. Under property tax rule 309, the local taxing authority must give written notice identifying any litigation that extends the two-year period. The written notice defines and measures the tolling period. Under the rule, the time tolled is only that time from the giving of written notice. United Enterprises, Ltd. v. Assessment Appeals Board, 22 Cal.App.4th 152. A taxpayer may be estopped from claiming the benefit of the two-year period because the taxpayer's attorney, without notice to the appeals board, subtly altered the board's waiver agreement and misled the board's clerk into believing that no alteration had been made, with the result that the hearing on the application took place six days beyond the waiver period as modified by the attorney. Stocker Resources, Inc. v. Assessment Appeals Board, 49 Cal.App.4th 391.

Note.—As to untimely correction of assessment roll, see annotation to Section 1650.