Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2015
 

Revenue and Taxation Code

Property Taxation

Part 0.5. Implementation of Article XIII A of the California Constitution

Chapter 1. Base Year Values

Section 51.5

51.5. Errors and omissions in determination of base year value.(a) Notwithstanding any other provision of the law, any error or omission in the determination of a base year value pursuant to paragraph (2) of subdivision (a) of Section 110.1, including the failure to establish that base year value, which does not involve the exercise of an assessor's judgment as to value, shall be corrected in any assessment year in which the error or omission is discovered.

(b) An error or an omission described in subdivision (a) which involves the exercise of an assessor's judgment as to value may be corrected only if it is placed on the current roll or roll being prepared, or is otherwise corrected, within four years after July 1 of the assessment year for which the base year value was first established.

(c) An error or an omission involving the exercise of an assessor's judgment as to value shall not include errors or omissions resulting from the taxpayer's fraud, concealment, misrepresentation, or failure to comply with any provision of law for furnishing information required by Sections 441, 470, 480, 480.1, and 480.2, or from clerical errors.

(d) If a correction authorized by subdivision (a) or (b) reduces the base year value, appropriate cancellations or refunds of tax shall be granted in accordance with this division. If the correction increases the base year value, appropriate escape assessments shall be imposed in accordance with this division.

(e) The existence of a clerical error shall be proved by a preponderance of the evidence, except that if the correction is made more than four years after July 1 of the assessment year for which the base year value was first established the clerical error shall be proved by clear and convincing evidence, including the papers in the assessor's office. Nothing in this subdivision shall be construed to change the standard of proof applicable to a determination of the value of property.

(f) For purposes of this section:

(1) "Assessment year" means an assessment year as defined in Section 118.

(2) "Clerical errors" means only those defects of a mechanical, mathematical, or clerical nature, not involving judgment as to value, where it can be shown from papers in the assessor's office or other evidence that the defect resulted in a base year value that was not intended by the assessor at the time it was determined.

History.—Added by Stats. 1987, Ch. 537, in effect January 1, 1988. Stats. 1990, Ch. 126, in effect June 11, 1990, substituted "base year" for "base-year" throughout section and added ", or is otherwise corrected," after "prepared" in subdivision (b).

Note.—Section 1(a) of Stats. 1987, Ch. 537, provided that the Legislature finds and declares that fairness and equity require that county assessors have express authority to make corrections to property tax base-year values whenever it is discovered that a base-year value does not reflect applicable constitutional or statutory valuation standards or the base-year value was omitted. Any limitations imposed upon the assessor's authority to correct these errors would result in a system of taxation which, on the one hand, denies the benefits of Article XIII A of the California Constitution to some taxpayers where the barred error or correction would reduce the base-year value and, on the other hand, encourages even the most honest person to engage in deception and concealment in order to delay discovery of changes in ownership or new construction beyond the point where a correction of the base-year value can be made. Further, the failure to place any value on the assessment roll for property which completely escapes taxation because of limitations on the authority to correct errors would violate the constitutional requirement that all property in the state shall be subject to taxation. Nothing in this act violates either the spirit or the letter of Article XIII A of the California Constitution since all corrections permitted by it must be consistent with applicable constitutional and statutory valuation standards.

Construction.—This section was enacted to provide guidelines for county assessors in making base year value corrections, and it does not override the prospective application provision of Section 80, subdivision (a)(5) for a reduced base year value year determined as a result of a taxpayer's successful application for reduction of such value. Thus, a taxpayer whose appeal of a 1989 supplemental assessment was untimely but whose appeal of a 1990 assessment was successful based upon information supplied with the 1989 appeal was not entitled to a retroactive refund of the 1989 taxes. Sea World, Inc. v. San Diego County, 27 Cal.App.4th 1390. For purposes of subdivision (a) of this section, if the assessor fails to establish a new base year value after a change in ownership of property but continues to enroll adjustments for inflation to the property's prior base year value, such adjustments do not constitute an exercise of judgment as to value which would preclude the assessor from correcting the base year value in any year in which the omission is discovered. Enrolling an adjusted base year value is done pro forma by applying an inflation factor to the previous year's entry. Montgomery Ward & Co., Inc. v. Santa Clara County, 47 Cal.App.4th 1122.

This section provides an independent mechanism for correcting base-year values apart from the normal appeals procedures of Section 80. While Section 80(a)(3) imposes a four-year time limit on appealing base-year reassessments, this section specifically states that notwithstanding any other provision of law, nonjudgmental errors shall be corrected in any assessment year in which the error or omission is discovered. Since the purpose of this section is to remove any time limits on correcting the roll based on nonjudgmental errors, reading a statute of limitations back into the law would run contrary to the express wording of the statute. Sunrise Retirement Villa v. Dear, 58 Cal.App.4th 948.

A taxpayer's application for reduction in the base year value of a property, relating to a utility easement, under subdivision (b) of Section 51.5 was not timely filed within the four-year limitations period. As a recorded easement, a property owner and an assessor are charged with constructive notice of the easement such that the assessor is presumed to have accounted for the easement at the time the base year value of the property was determined. Consequently, the consideration of recorded easements is encompassed within an assessor's exercise of judgment as to value under subdivision (b) of Section 51.5, as such easements directly affect the fair market value of a property. Kuperman v. Assessment Appeals Board No. 1, 137 Cal.App.4th 918. An action for a refund of taxes is time-barred where the asserted error involved the assessor's exercise of judgment as to value in a previous determination. Little v. Los Angeles County Assessment Appeals Boards,155 Cal.App.4th 915.

Application for reduction of base year value.—Taxpayer requested correction of the base year value within four years, consistent with subdivision (b). As to whether the applications for reduction in assessment were filed under this section, the reason provided on the county's preprinted form, "Assessor's improper method of calculation", was sufficient to put the county on notice that an appeal was being taken thereunder. Metropolitan Culinary Services, Inc. v. Los Angeles County, 61 Cal.App.4th 935.

Escape assessments.—Base year value errors or omission not involving an assessor's judgment as to value may be corrected in any year in which those errors or omissions are discovered, notwithstanding the limitations periods for levying escape assessments. However, where a correction increases the base year value, "appropriate escape assessments" as intended by subdivision (d) of this section may be made only within the time limitations of Revenue and Taxation Code Section 532. Montgomery Ward & Co., Inc. v. Santa Clara County, 47 Cal.App.4th 1122.

Mandamus.—Because the taxpayer did not request a new hearing before the board or otherwise challenge the board's determination that it lacked jurisdiction by reason of untimeliness (Revenue and Taxation Code sections 51.5, subdivision (b), 80, subdivision (a)(3)), case law providing that an assessment appeals board can be compelled to hold a hearing when it erroneously fails or refuses to decide an issue did not apply, and mandate relief thus was unavailable (California Constitution article XIII, section 32; Revenue and Taxation Code section 4807). William Jefferson & Co., Inc. v. Orange County Assessment Appeals Board No. 2 (2014) 228 Cal.App.4th 1.

Base Year Value Correction.—Revenue and Taxation Code section 51.5 imposes a ministerial duty on an assessor to correct an error in the determination of a base year value during the assessment year in which the error is discovered. Depending on the nature of the error, the statute establishes time limits on an assessor's authority to correct a base year value. If the error involves the exercise of an assessor's judgment as to value, subdivision (b) authorizes the assessor to correct the error up to four years after the base year value was first established. If the error does not involve the exercise of an assessor's judgment as to value, subdivision (a) requires the assessor to correct the error during the year in which it is discovered regardless of how much time has elapsed since the base year value was first established. William Jefferson & Co., Inc. v. Orange County Assessment Appeals Board No. 2 (2014) 228 Cal.App.4th 1.

Base Year Value Correction.—Judgmental errors subject to the four-year time limit (Revenue and Taxation Code section 51.5, subdivision (b)) typically involve a claim the assessor's determination of the base year value failed to reflect the property's fair market value. Nonjudgmental errors subject to correction at any time (Revenue and Taxation Code section 51.5, subdivision (a)) include (1) an assessor's erroneous determination that a change of ownership occurred; (2) the assessor's failure to set a new base year value upon a change of ownership; (3) defects of a mechanical, mathematical, or clerical nature, not involving judgment as to value, where it can be shown from papers in the assessor's office or other evidence that the defect resulted in a base year value that was not intended by the assessor at the time it was determined; and (4) errors or omissions that result from the taxpayer's fraud, concealment, misrepresentation or failure to comply with legal requirements for furnishing information. William Jefferson & Co., Inc. v. Orange County Assessment Appeals Board No. 2 (2014) 228 Cal.App.4th 1.

Base Year Value Correction—Change of Ownership Determination.—An assessor's change of ownership determination can be corrected at any time under Revenue and Taxation Code section 51.5, subdivision (a), because it does not involve the assessor's exercise of judgment as to the property's value. The appeals board therefore does not lack jurisdiction to decide the change of ownership dispute. However, neither the Court of Appeal nor the trial court can decide whether the assessor erred in determining a change of ownership had occurred because the governing statutes require the appeals board to decide the issue. The proper remedy is to order the appeals board to perform its statutorily mandated duty and decide the change of ownership dispute because mandamus lies to compel an agency to perform its duties, but not to control the agency's discretion in performing those duties. William Jefferson & Co., Inc. v. Orange County Assessment Appeals Board No. 2 (2014) 228 Cal.App.4th 1. deletion