Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2014
 

Revenue and Taxation Code

Property Taxation

Part 9. Corrections, Cancellations, and Refunds

CHAPTER 5. Refunds


Chapter 5. Refunds

Article 1. Refunds Generally

5096. Refunds permissible. Any taxes paid before or after delinquency shall be refunded if they were:

(a) Paid more than once.

(b) Erroneously or illegally collected.

(c) Illegally assessed or levied.

(d) Paid on an assessment in excess of the ratio of assessed value to the full value of the property as provided in Section 401 by reason of the assessor's clerical error or excessive or improper assessments attributable to erroneous property information supplied by the assessee.

(e) Paid on an assessment of improvements when the improvements did not exist on the lien date.

(f) Paid on an assessment in excess of the value of the property as determined pursuant to Section 1614 by the county assessment appeals board.

(g) Paid on an assessment in excess of the value of the property as determined by the assessor pursuant to Section 469.

History.—Stats. 1941, p. 2114, in effect September 13, 1941, deleted reference to penalties and costs and substituted "paid before or after delinquency" for "heretofore or hereafter paid." Stats. 1963, p. 4343, in effect September 20, 1963, added subsection (e). Stats. 1966, p. 682 (First Extra Session), in effect October 6, 1966, substituted "ratio of assessed value to the cash value of the property as provided in Section 401" for "cash value of the property" and added to subsection (c) last clause beginning with "or excessive"; and in subsection (e), deleted "cash" and "or a tax appeals board", and added "Section 1611 or." Stats. 1974, Ch. 311, p. 618, in effect January 1, 1975, substituted "full value" for "cash value" in subsection (c). Stats. 1976, Ch. 499, p. 1239, in effect January 1, 1977, relettered the former subsections (c), (d), and (e) as subsections (d), (e), and (f), respectively, and added subsection (c). Stats. 1977, Ch. 246, in effect January 1, 1978, substituted "1630" for "1611 or Section 1760" in subsection (f). Stats. 1977, Ch. 921, in effect January 1, 1978, substituted "Section 1613" for Section "1630". Stats. 1978, Ch. 732, in effective January 1, 1979, added subdivision (g). Stats. 1991, Ch. 532, in effect January 1, 1992, substituted "Any" for "On order of the board of supervisors, any" before "taxes" in the first paragraph. Stats. 1992, Ch. 427, in effect January 1, 1993, added "the" after "supplied by" in subdivision (d). Stats. 2011, Ch. 352 (SB 948), in effect January 1, 2012, deleted "equalized" after "excess of the", substituted "1614" for "1613" after "to Section", and substituted "assessment appeals board" for "board of equalization" after "the county" in the first sentence of subdivision (f).

Note.—Section 15 of Stats. 1976, Ch. 499, p. 1244, provided that the provisions of this act shall be operative with respect to taxes which become due and payable on or after the lien date in 1977.

Construction.—In general.—This section is remedial and should be liberally construed to carry out its intent and object of preventing the inequitable retention by the county of money which has been improperly collected. Hayes v. Los Angeles County, 99 Cal. 74; Pacific Coast Co. v. Wells, 134 Cal. 471; Midstate Theatres, Inc. v. Board of Supervisors, 46 Cal.App.3d 204; Focus Cable of Oakland, Inc. v. Alameda County, 173 Cal.App.3d 519. It is applicable regardless of whether the taxes were paid involuntarily or under protest. Stewart Law & Collection Co. v. Alameda County, 142 Cal. 660. The remedies given by this and by the following article are cumulative. Birch v. Orange County, 186 Cal. 736.

This section does not require that to justify a refund the taxes must be erroneous or illegal, but only that they have been "erroneously or illegally collected" and consequently personal property taxes which were legally due, but improperly exacted of a claimant as a condition to redemption of real property owned by him, were recoverable under this section. Evans v. San Joaquin County, 67 Cal.App.2d 452. Although a valuation dispute was presented when the assessor entered an escape assessment, after the assessor conducted a new audit and appraisal and the parties agreed upon the true value of the taxpayer's property, no dispute existed and thus, it was proper for the board of supervisors to refund an overpayment of tax pursuant to this section. Focus Cable of Oakland, Inc. v. Alameda County, 173 Cal.App.3d 519.

Division 1, Part 9, Chapter 5, of this code applies only to the recovery of property taxes and not to license taxes or fines. Bainbridge v. Riverside County, 167 Cal.App.2d 418.

This section does not apply to delinquency penalties. People ex rel. Strumpfer v. Westoaks Inv. #27, 139 Cal.App.4th 1038.

Public Utility Company.—A public utility company with real property in several counties seeking to reduce the assessment of such property can choose a target forum and, in the event that it receives a favorable judgment, can obtain refunds from the remaining counties under this section. Pacific Gas & Electric Co. v. State Board of Equalization, 27 Cal.3d 277.

Mandamus.—The action of the board of supervisors under this section is judicial and therefore, the decision of the board may not be controlled by mandamus. Younger v. Board of Supervisors, 68 Cal. 241. When a claim has been properly allowed by the board of supervisors, mandamus will lie against the auditor to compel payment. Pacific Coast Co. v. Wells, supra. If, however, the order of the supervisors is improper because a claim was not filed within the time required by law, it is the duty of the auditor to disregard it. Perrin v. Honeycutt, 144 Cal. 87; Murphy v. Bondshu, 2 Cal.App. 249.

A taxpayer may obtain a writ of mandate to compel a county board of supervisors to formally reject or otherwise act upon its claim for refund of property taxes paid. Signal Oil & Gas Co. v. Bradbury, et al., 183 Cal.App.2d 40.

Failure to act is a rejection.—The nonaction of the board for a period exceeding six months following the filing of a claim under this article amounts to a rejection and authorizes an action to recover the amount of the claim. Otis v. San Francisco, 170 Cal. 98.

Revenue districts.—Parties defendant.—In actions to enforce rights under this section the county is authorized to appear and defend on behalf of the entities whose taxing functions have been consolidated with those of the county, and it is not necessary that such entities be made parties defendant. It is doubtful if the foregoing rule can be affected by a municipal ordinance providing that all suits for the refund of city taxes must be brought against the city and be defended by the city attorney. Los Angeles County v. Superior Court, 17 Cal.2d 707.

Claim not barred by application to county board of equalization.—The fact that an owner files an application for a reduction in an assessment does not bar a claim for refund on the ground that the property in question is exempt from taxation, at least when the refund claim is filed prior to the appearance before the board. Pasadena Playhouse Assn. v. Los Angeles County, 69 Cal.App.2d 611.

Other recoverable payments.—Delinquent special assessments paid after all outstanding improvements bonds were purchased by the county and delivered to the special assessment district for cancellation pursuant to legislation enacted for the relief of property owners in distressed assessment districts may be recovered under this section. S. Siwel Co. v. County of Los Angeles, 27 Cal.2d 724; Himes v. Los Angeles County, 27 Cal.2d 891.

Subdivision A

Double payment.—If a tax sale is void because the taxes had been paid by the owner, the amount paid by the purchaser may be recovered under this section. Hayes v. Los Angeles County, 99 Cal. 74.

Subdivision B

Excessive valuation.—Overpayments of tax resulting from an excessive assessment are not recoverable under this section. The property owner's only remedy in such cases is by application to the county board of equalization, even though the property is entirely without taxable value. Los Angeles etc., Corp. v. Los Angeles County, 22 Cal.App.2d 418. Taxes on solvent credits are not "erroneously or illegally collected" within the meaning of this section by reason of the refusal of the assessor to allow the entire deduction due on account of debts. Such a situation presents merely a case of overvaluation. Southern California Hardwood, etc. Co. v. Los Angeles County, 49 Cal.App. 712.

On the other hand, a recovery will be allowed if the over-assessment results from an error in the property statement furnished the assessor. Pacific Coast Co. v. Wells, 134 Cal. 471; Associated Oil Co. v. Orange County, 4 Cal.App.2d 5.

Furthermore, a tax is "illegally collected" within the meaning of this section if the property owner's application to the board of equalization is heard by less than a majority of the board or if the denial of the application is based on evidence taken out of his presence. Bandini Estate Co. v. Los Angeles County, 28 Cal.App.2d 224.

Other recoverable payments.—Taxes paid by a city upon lands annexed by it (City of Long Beach v. Board of Supervisors, 50 Cal.2d 674); overpayments resulting from a excessive and illegal tax rate (Connelly v. San Francisco, 164 Cal. 101, and Otis v. Los Angeles County, 9 Cal.2d 366); penalties illegally exacted from a redemptioner (Palomares Land Co. v. Los Angeles County, 146 Cal. 530); and taxes erroneously paid by the holder of a certificate of purchase of lieu lands (Slade v. Butte County, 14 Cal.App. 453) may be recovered under this section.

Void tax sales.—This section confers no rights upon the purchaser at a void tax sale except in cases covered by the previous subdivision. In other cases the purchaser must proceed in accordance with Section 3729. See Brooks v. Tulare County, 117 Cal. 465.

Voluntary Payment.—A person paying tax on land he does not own is a volunteer and is not entitled to a refund under this section. Erroneous collection does not include erroneous payment. Sierra Investment Corp. v. Sacramento County, 252 Cal.App.2d 339.

Subdivision C

Clerical error.—A clerical error results from an incorrect figure or word inadvertently used, and not from the erroneous exercise of judgment or discretion. Thus, an overpayment resulting from the deliberate and intentional use by the assessor of an erroneous figure or method of valuation presents merely a case of overvaluation, the remedy for which is by application to the board of equalization. Kuhlemeier v. Los Angeles County, 2 Cal.2d 257; Los Angeles etc. Corp. v. Los Angeles County 22 Cal.App.2d 418.

The term "actual cash value" as used in former Political Code Section 3804 and determined by county assessor to be 50 percent of appraised value, did not mean something greater than "full cash value" as used in former Political Code Section 3627. Thus, where property was assessed in excess of its full cash value due to clerical error, refund could not be withheld on the ground that the assessment was not in excess of the actual cash value. Orpheum Circuit, Inc. v. Los Angeles County, 12 Cal.App.2d 257.

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5096.1. Refunds; annexation without detachment proceedings. Except as hereinafter provided, taxes collected on behalf of a local agency from a taxpayer whose property has been annexed to a second local agency but was not detached from the first local agency due to error or inadvertence shall be deemed to have been erroneously collected for purposes of Section 5096 if the governing board of the first local agency makes a finding by resolution that detachment proceedings were not commenced due to excusable neglect. If the first local agency is a fire protection district the governing body of the annexing agency may make the finding by resolution that detachment proceedings were not commenced following annexation due to excusable neglect. For purposes of determining the amount of the refund the property shall be deemed to have been detached from the first local agency on the date annexation proceedings were completed.

This section shall not apply to taxes which would be collectible under authority of Government code Section 56492 even though the annexed property had been detached from the special district.

History.—Added by Stats. 1974, Ch. 707, p. 1579, in effect September 6, 1974. Stats. 1976, Ch. 164, p. 271, in effect May 12, 1976, substituted "local agency" for "special district", substituted "second local agency" for "city", and substituted "first local agency" for "special district", in the first sentence; substituted "first local agency" for "special district", and substituted "agency" for "city" in the second sentence; and substituted "first local agency" for "special district" in the third sentence of the first paragraph.

Note.—Section 2 of Stats. 1974, Ch. 707, p. 1580, provided no payment by state to local governments because of this act. Section 2 of Stats. 1976, Ch. 164, p. 271, provided that there are no state-mandated local costs imposed on local governments by this act.

5096.3. Refunds to state or other public agencies. [Repealed by Stats. 1979, Ch. 31, in effect January 1, 1980.]

5096.3. Tax credits; airlines. (a) To dispose of certain lawsuits and assessment appeals that have been filed, and to preclude the filing of other claims relating to (1) the assessment, equalization, and assessability of certain possessory interests in publicly owned airports and (2) aircraft valuation and equalization by Alaska Airlines, Inc., American Airlines, Inc., Continental Airlines, Inc., Delta Air Lines, Inc., Federal Express Corporation, Northwest Airlines, Inc., Trans World Airlines, Inc., United Airlines, Inc., United Parcel Service, U.S. Airways, Inc., Wings West Airlines, Southwest Airlines, America West Airlines, in their own right or as successors in interest, counties shall provide future tax credits in the following amounts:

Alameda

$4,455,110

Contra Costa

1,000

El Dorado

1,000

Fresno

264,630

Humboldt

500

Kern

33,540

Los Angeles

18,335,720

Monterey

148,560

Orange

2,916,995

Riverside

435,780

Sacramento

1,070,185

San Bernardino

1,991,405

San Diego

4,262,610

San Joaquin

1,000

San Mateo

13,544,005

Santa Barbara

167,880

Santa Clara

2,369,080

Solano

1,000

(b) The credits identified in subdivision (a) will be allowed in equal amounts for the 1998–99 fiscal year to the 2002–03 fiscal year, inclusive, and may be credited by the counties against one or more tax bills of the airline entitled to the credit. The credits identified in subdivision (a) shall be allocated among the airlines in accordance with a schedule to be established and agreed upon by the airlines identified in subdivision (a). The airlines shall, through a designated representative, provide to each county listed in subdivision (a), before the effective date of this measure, the detail of the allocation of the credits among the various airlines. In no instance shall a county be required to provide a credit to any airline in any year that exceeds the total tax due from that airline to that county for that year. The airlines' designated representative may submit revised instructions not later than June 30 preceding the beginning of the fiscal year in which the credits are to be adjusted, but in no event may the credit for any county in any year be increased beyond the levels set out in subdivisions (a) and (b) for any fiscal year.

(c) In addition to the credits provided in subdivision (a), each county shall allow a credit against any escape assessment upon certificated aircraft levied on or after April 1, 1998, under subdivision (b) of Section 401.15 for tax years up to and including the 1997–98 fiscal year to the extent the escape assessment is based upon the cost established in sale/leaseback or assignment of purchase rights transaction. The amount of the credit shall be equal to the tax on one-half of the value increase, plus interest and penalties attributable to use of the sale/leaseback or assignment of purchase rights transaction amount to determine value pursuant to subdivision (b) of Section 401.15.

(d) Upon enrollment of any escape assessment contemplated in subdivision (a) of Section 401.15, the county assessor shall provide the county auditor with the information necessary to calculate the credit required in subdivision (c) of this section.

(e) No county shall be required to provide the credits specified in subdivisions (a) and (b) unless all airlines named in subdivision (a) who also have assessments in that county have entered into a settlement agreement or executed a waiver with that county. No county shall be required to provide the credits specified in subdivision (c) unless the airline otherwise entitled to that credit has entered into a settlement agreement or executed a waiver with that county. The settlement agreement or waiver shall include a waiver of all statutory and constitutional rights with respect to pending and future challenges to valuation and equalization of certificated aircraft through the 2003–04 fiscal year, provided that the assessments are established in conformance with Section 401.15, and all statutory and constitutional rights to challenge valuation, equalization and assessability of possessory interests in publicly owned airports (other than interests stated in a written agreement for terminal, cargo, hangar, automobile parking lots, storage and maintenance facilities, and other buildings and the land thereunder leased in whole or in part by an airline), provided that the valuations made for the 1998–99 fiscal year and thereafter are established in conformance with Section 107.9. At the discretion of a county, the airlines may be required to file waivers in that county in lieu of entering into a settlement agreement. Upon the execution of a settlement agreement or waiver by the airlines named in subdivision (a) that also have assessments in a county, that county listed in subdivision (a) shall be required to provide the credits set out in this section. Nothing in this section precludes claims concerning allocation of aircraft values.

(f) With respect to America West Airlines only, the waiver or settlement agreement required by subdivision (e) may exclude the claims that America West Airlines has already raised in the adversary proceedings in the bankruptcy proceeding entitled "In Re America West Airlines, Inc., Case No. 91–07505 PHX-RGM" against the Counties of Orange, San Bernardino, Sacramento, San Mateo, Alameda, and San Diego, provided that the settlement agreements or waivers under subdivision (e) provide that the resolution of any of America West's adversary claims will have no legal effect for any tax year not at issue in those adversary proceedings. This section and Sections 107.9 and 401.15 do not abrogate, rescind, preclude, or otherwise affect any separate settlement agreement entered into prior to the effective date of this section between a county and an airline concerning the subject matter of this section and Sections 107.9 and 401.15 with respect to those tax years expressly settled by any agreement as so described. However, no settlement agreement as so described may be used to challenge the assessment and valuation provided by these sections for any tax year after the 1997–98 fiscal year or any tax year not expressly settled by that agreement.

History.—Added by Stats. 1998, Ch. 86 (AB 1807), in effect June 30, 1998.

Note.—Section 4 of Stats. 1998, Ch. 86 (AB 1807), provided that the Legislature finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique legal, fiscal, and administrative issues faced by the counties specified in this act with respect to unresolved disputes in those counties concerning the proper taxation of certificated aircraft.

Section 6 thereof provided that this act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:

This measure is necessary to provide guidance and clarification that is essential to the fair and efficient taxation of airline industry property and possessory interests in publicly owned airports in the current year, and to clarify the status of prior-year property tax payments that have funded essential services provided by local governments and schools.

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5096.5. Refunds for retroactive exemptions. Any taxes paid which were not erroneously or illegally collected under the law as it existed at the time of collection, but for which an exemption is provided by a retroactive constitutional amendment, shall be refunded after compliance with the provisions of this article, except that the claim for refund may be filed at any time within four years after the date such amendment became effective, or the date that this section became effective, whichever is later.

History.—Added by Stats. 1957, p. 2800, in effect September 11, 1957. Stats. 1976, Ch. 156, p. 254, in effect January 1, 1977, substituted "four" for "three". Stats. 1991, Ch. 532, in effect January 1, 1992, substituted "Any" for "On order of the board of supervisors, any" before "taxes".

Note.—Stats. 1957, p. 2800, adding Section 5096.5, declares it is the intention of the Legislature to clarify the mode by which refunds may be made when tax exemption is retroactively granted by constitutional amendment.

5096.7. Refund to person paying the tax. If taxes have been paid on property acquired by negotiated purchase by any public entity designated in Section 5081 after the commencement of the fiscal year for which the taxes are a lien on the property, the portion of such taxes which are allocable to that part of the fiscal year which begins on the date of apportionment determined pursuant to Section 5082 and made uncollectible if unpaid by virtue of Section 5086, shall be deemed erroneously collected and shall be refunded to the person who has paid the tax, where the person was not otherwise reimbursed for that portion of the taxes by the public entity which acquired the property.

Refunds under this section shall be applicable to taxes paid on either the secured or unsecured rolls.

History.—Added by Stats. 1963, p. 1485, in effect September 20, 1963. Stats. 1968, p. 894, in effect June 28, 1968, revised language to include property purchased by the United States. Stats. 1976, Ch. 156, p. 255, in effect January 1, 1977, substituted "(b)" for "2(a)" in the first sentence of the first paragraph. Stats. 1979, Ch. 31, in effect January 1, 1980 substituted "Section 5081" for "subdivision (b) of Section 4986," "apportionment determined pursuant to Section 5082" for "the acquisition of the property", "5086" for "4986" and added "the" before "person".

5096.8. Refund due to reduction in base year value. (a) In the case where a reduction in a base year value of real property results in a supplemental assessment for the value of the reduction being levied and charged to a subsequent owner of that property, that portion of any refund, due and owing to a former owner of that property, in the amount of the taxes on the reduction in base value after the former owner sold or transferred ownership of the property, shall be applied to satisfy that supplemental assessment.

(b) Any person claiming a refund due to a reduction in base year value shall certify under penalty of perjury whether he or she has sold or transferred ownership of the property to any other person, and if so, the date of sale or transfer.

(c) This section shall not apply in any county unless the board of supervisors adopts a resolution by majority vote to make the provisions of this section applicable in the county.

History.—Added by Stats. 1990, Ch. 974, in effect January 1, 1991.

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5097. Conditions. (a) No order for a refund under this article shall be made, except on a claim:

(1) Verified by the person who paid the tax, his or her guardian, executor, or administrator.

(2) Except as provided in paragraph (3), filed within four years after making the payment sought to be refunded, or within one year after the mailing of notice as prescribed in Section 2635, or the period agreed to as provided in Section 532.1, or within 60 days of the date of the notice prescribed by subdivision (a) of Section 4836, whichever is later.

(3) (A) Filed within one year, if an application for a reduction in an assessment or an application for equalization of an assessment has been filed pursuant to Section 1603 and the applicant does not state in the application that the application is intended to constitute a claim for a refund, of either of the following events, whichever occurs first:

(i) After the county assessment appeals board makes a final determination on the application for reduction in assessment or on the application for equalization of an escape assessment of the property, and mails a written notice of its determination to the applicant and the notice does not advise the applicant to file a claim for refund.

(ii) After the expiration of the time period specified in subdivision (c) of Section 1604 if the county assessment appeals board fails to hear evidence and fails to make a final determination on the application for reduction in assessment or on the application for equalization of an escape assessment of the property.

(B) Filed within six months, if an application for a reduction in an assessment or an application for equalization of an assessment has been filed pursuant to Section 1603 and the applicant does not state in the application that the application is intended to constitute a claim for a refund, after the county assessment appeals board makes a final determination on the application for reduction in assessment or on the application for equalization of an escape assessment, and mails a written notice of its determination to the applicant and the notice advises the applicant to file a claim for refund within six months of the date of the county assessment appeals board's final determination.

(b) An application for a reduction in an assessment filed pursuant to Section 1603 shall also constitute a sufficient claim for refund under this section if the applicant states in the application that the application is intended to constitute a claim for refund. If the applicant does not so state, he or she may thereafter and within the period provided in paragraph (3) of subdivision (a) file a separate claim for refund of taxes extended on the assessment which the applicant applied to have reduced pursuant to Section 1603 or Section 1604.

(c) If an application for equalization of an escape assessment is filed pursuant to Section 1603, a claim may be filed on any taxes resulting from the escape assessment or the original assessment to which the escape relates within the period provided in paragraph (3) of subdivision (a).

History.—Stats. 1963, p. 4344, in effect September 20, 1963, added the second paragraph. Stats. 1966, p. 682 (First Extra Session), in effect October 6, 1966, added "Section 1607 or" to the second paragraph. Stats. 1967, p. 2118, in effect November 8, 1967, added "or within one year . . . whichever is later," after "refunded" in subsection (b); and added everything after "refund under this section" in the first sentence of the second paragraph; and added the second sentence of the second paragraph. Operative as to any payment made more than once prior to effective date and to any payment made after. Stats. 1970, p. 1037, in effect November 23, 1970, substituted "four" for "three" in subsection (b) of the first paragraph. Stats. 1975, Ch. 224, p. 605, in effect January 1, 1976, substituted "Section 1603" for "Section 1607 or Section 1760" in the first sentence of the second paragraph. Stats. 1976, Ch. 499, p. 1239, in effect January 1, 1977, substituted "Section 1603 or Section 1604" for "Section 1607 or Section 1760" in the second sentence of the second paragraph. Stats. 1978, Ch. 732, in effect January 1, 1979, designated the first sentence of the first paragraph as subdivision "(a)", the second sentence as "(a)(1)" in place of (a), the third sentence as "(a)(2)" in place of (b). Substituted the second paragraph as subdivision "(b)" substituted "provided in paragraph (2) of subdivision (a)" for "provided in subdivision (b)", and added subdivision (c). Stats. 1983, Ch. 1224, in effect January 1, 1984, added "or the period agreed to as provided in Section 532.1," after "Section 2635," in subdivision (a)(2). Stats. 1984, Ch. 946, in effect September 10, 1984, added subdivision (d). Stats. 1987, Ch. 1184, in effect January 1, 1988, operative July 1, 1988, added "or her" after "his", in subdivision (a)(1); added "or she" following "he" in the second sentence of subdivision (b); and deleted former subdivision (d), which pertained only to refunds of property taxes levied by the City of Fresno. Stats. 2008, Ch. 329 (AB 2411), in effect January 1, 2009, substituted "Except as provided in paragraph (3), filed" for "Filed" before "within four years", deleted "of" after "years after making", added a comma after "to be refunded", and added "or within 60 days of the date of the notice prescribed by subdivision (a) of Section 4836," after "in Section 532.1," in the first sentence of paragraph (2) and added paragraph (3) to subdivision (a); substituted "paragraph (3)" for "paragraph (2)" after "period provided in" and added "the" after "the assessment which" in the second sentence of subdivision (b); and substituted "paragraph (3)" for "paragraph (2)" after "period provided in" and deleted "or within 60 days from the date the board of equalization makes its final determination on the application, whichever is later" after "of subdivision (a)" in the first sentence of subdivision (c).

Note.—Section 4 of Stats. 2008, Ch. 329 (AB 2411), provided that: (a) The amendments made by this act to Sections 5097 and 5151 of the Revenue and Taxation Code shall not affect any litigation involving property tax refunds pending before January 1, 2009, that assert either of the following:

(1) Claims of miscalculation of interest paid under Section 5151 of the Revenue and Taxation Code.

(2) Claims interposing noncompliance with Section 2635 of the Revenue and Taxation Code to revive property tax refund claims otherwise outside the tax refund limitation period of Section 5097 of the Revenue and Taxation Code.

(b) Nothing in the legislative history of the amendments made by this act shall be construed as any indication of the meaning of the law as it existed prior to the effective date of the amendments made by this act.

Section 5 thereof, provided that if the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.

Construction.—This section does not include delinquency penalties. People ex rel. Strumpfer v. Westoaks Inv. #27, 139 Cal.App.4th 1038. The four-year statute of limitations in this section applies to an action seeking a refund of fraud penalties imposed under previous versions of Sections 503 and 504. JP Morgan Chase Bank, N.A. v. City and County of San Francisco, 174 Cal.App.4th 1201.

Necessity for claim.—Correction of a base-year value under Section 51.5 does not automatically entitle the taxpayer to a refund. Refunds are governed by separate statutes, and the taxpayer may only recover a refund by complying with those statutes. Sunrise Retirement Villa v. Dear, 58 Cal.App.4th 948. Federal declaratory action by taxpayer, seeking determination that federal law preempted assessor's ruling that a taxable change in ownership occurred with respect to property, did not fulfill taxpayer's duty to file a timely tax refund claim. JP Morgan Chase Bank, N.A. v. City and County of San Francisco, 174 Cal. App. 4th 1201.

Verification.—Substantial compliance with the requirement that a claim for refund be verified by the person who paid the tax is achieved if representatives of the class verify the claim for refund for the class. Schoderbek v. Carlson, 113 Cal.App.3d 1029. (Disapproved by Woosley v. State of California, 3 Cal.4th 758.) Although taxpayers' refund claims were improperly signed by their attorney rather than by them, and hence, were not properly verified, the defect was not fatal to taxpayers' claims; therefore, taxpayers properly exhausted their administrative remedies. Generally, the object of a verification is to assure good faith in the averments or statements of a party. Where there is no allegation of counsel's bad faith, a claim of inadequate verification is without merit. Mission Housing Development Company v. City and County of San Francisco, 59 Cal.App.4th 55.

Class action.—Class actions for refunds of taxes are not authorized unless specifically provided for by statute. Woosley v. State of California, 3 Cal.4th 758.

This section does not provide for a class action. Neecke v. City of Mill Valley, 39 Cal.App.4th 946. (This decision construed Woosley v. State of California, 3 Cal.4th 758 as overruling Schoderbek v. Carlson, 113 Cal.App.3d 1029.)

Interest.—There is no implied contract that interest will be paid on all claims for refund. Interest may be paid only pursuant to a specific statute. Ball v. Los Angeles County, 82 Cal.App.3d 312, cert. den. 439 U.S. 1116.

Statute of limitations.—Claims for refunds of taxes erroneously collected must be made, in the case of installment payments, within three years from the date of payment of the last installment. McDougall v. Marin County, 208 Cal.App.2d 65. Unless a taxpayer states in an application for reduction of assessment that the application is intended to constitute a claim for refund, under this section, the taxpayer must file a separate refund claim within four years of paying the tax. Thus, a claim for refund filed 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.

Taxpayers were required to meet the four-year limitation period of subdivision (b), even though they were awaiting a decision by the assessment appeals board on their applications for reduction in assessment, which were timely filed. Mission Housing Development Company v. City and County of San Francisco, 59 Cal.App.4th 55. Where taxpayer asserts entitlement to a refund because of exemption from ad valorem taxes under the "welfare exemption" pursuant to Section 268, he is not excused from filing his claim for refund within the three-year period. Hartford v. Los Angeles County, 218 Cal.App.2d 613.

Code of Civil Procedure Section. 355, which allows one year for the filing of a new lawsuit when a judgment for the plaintiff in a prior suit is reversed other than on the merits, does not extend the time in which to file a Section 5097 claim when the taxpayer was not the plaintiff in the prior litigation. JP Morgan Chase Bank, N.A. v. City and County of San Francisco, 174 Cal.App.4th 1201.

The language of subdivision (b) is clear that the limitation period commences on the "making of the payment" and not on the date the tax becomes delinquent. The right to offset, under Code Civ. Proc., section 431.70, claims for refund of liability for previous years is independent of the right to a refund under subsection (b). Singer Co. v. Kings County, 46 Cal.App.3d 852.

Application.—The four-year statute of limitations in this section applies to applications for refund of overpayments of special benefit assessments imposed pursuant to Public Utilities Code section 33000 et seq. Hanjin International Corporation v. Los Angeles County Metropolitan Transportation Authority, 110 Cal.App.4th 1109. The four-year statute of limitations in this section applies to an action seeking a refund of fraud penalties imposed under previous versions of Sections 503 and 504. JP Morgan Chase Bank, N.A. v. City and County of San Francisco, 174 Cal.App.4th 1201. This section has no application to a claim for refund of personal property taxes erroneously assessed by a City to a taxpayer. Pasadena Hotel Development Venture v. City of Pasadena, 119 Cal.App.3d 412.

This section does not include delinquency penalties. People ex rel. Strumpfer v. Westoaks Inv. #27, 139 Cal.App.4th 1038.

Note.—The cases McDougall v. Marin County, 208 Cal.App.2d 65, and Hartford v. Los Angeles County, 218 Cal.App.2d 613, construed Section 5097 when the three-year period of limitations was applicable; however, Stats. 1970, Ch. 540, in effect November 23, 1970, extended the period of limitations to four years.

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5097.01. Property on 1975–76 roll subject to escape assessment; claim for refund. [Repealed by Stats. 1980, Ch. 103, in effect May 20, 1980, operative January 1, 1981.]

5097.02. Contents of claim for refund. The claim shall be in writing, specifying:

(a) Whether the whole assessment is claimed to be void or, if only a part, what portion.

(b) The grounds on which the claim is founded.

History.—Added by Stats. 1976, Ch. 499, p. 1240, in effect January 1, 1977.

Note.—Section 15 of Stats. 1976, Ch. 499, p. 1244, provided that the provisions of this act shall be operative with respect to taxes which become due and payable on or after the lien date in 1977.

Construction.—While taxpayer did not specify Revenue and Taxation Code Section 533 as the basis for its claim for refund or for its complaint, since its claim for refund was written in accordance with Sections 5096 and 5097 of the Code and discussed all material facts that had occurred up until that point in time, and since the same facts were set forth in the complaint, it was always clear from the facts presented that taxpayer was claiming it had been erroneously assessed in the original assessment. Focus Cable of Oakland, Inc. v. Alameda County, 173 Cal.App.3d 519.

5097.03. Amount not in dispute not to be impounded. When a claim for refund of taxes is filed, the amount of tax computed on the portion of the assessment not in dispute shall not be impounded.

History.—Added by Stats. 1976, Ch. 499, p. 1240, in effect January 1, 1977.

Note.—Section 15 of Stats. 1976, Ch. 499, p. 1244, provided that the provisions of this act shall be operative with respect to taxes which become due and payable on or after the lien date in 1977.

5097.1. Refunds by tax collector. [Repealed by Stats. 1983, Ch. 1211, in effect January 1, 1984.]

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5097.2. Limitations on refunds. Notwithstanding Sections 5096 and 5097, any taxes paid before or after delinquency may be refunded by the county tax collector or the county auditor, within four years after the date of payment, if:

(a) Paid more than once.

(b) The amount paid exceeds the amount due on the property as shown on the roll by an amount greater than ten dollars ($10).

(c) The amount paid exceeds the amount due on the property as the result of corrections to the roll or cancellations after those taxes were paid.

(d) In any other case, where a claim for refund is made under penalty of perjury and is for an amount less than ten dollars ($10).

(e) The amount paid exceeds the amount due on the property as the result of a reduction attributable to a hearing before an assessment appeals board or an assessment hearing officer.

History.—Added by Stats. 1965, p. 2665, in effect September 17, 1965. Stats. 1976, Ch. 156, p. 255, in effect January 1, 1977, substituted "four" for "three". Stats. 1983, Ch. 1211, in effect January 1, 1984, added "the county tax collector or" after "by" in the first sentence, and added subsection (e). Stats. 1984, Ch. 946, in effect September 10, 1984, added subdivision (f). Stats. 1987, Ch. 1184, in effect January 1, 1988, operative July 1, 1988, deleted "the provisions of" after "Notwithstanding", and deleted "the county tax collector or" after "refunded by" in the first sentence; and deleted "(f) A refund is ordered by a final decision of a court of competent jurisdiction, whether by final decision of the Supreme Court or a court of appeal of this state or by judgment of trial court becoming final without any appeal, and the taxes paid were either of the following:

(1) Erroneously or illegally collected.

(2) Illegally assessed or levied.

Refunds made in accordance with this subdivision on taxes paid shall include interest at the statutory rate for property tax refunds on the amount refunded. That interest shall be computed from the date the taxes were paid to the date of the court's judgment. After judgment, interest shall accrue at the statutory rate for judgments.

This subdivision shall be applicable only to refunds of property taxes levied by the City of Fresno. This subdivision shall be applicable only through June 30, 1986." Stats. 1988, Ch. 440, in effect January 1, 1989, added "county tax collector or the" before "county auditor" in the first sentence. Stats. 1991, Ch. 532, in effect January 1, 1992, deleted "ordered by the board of supervisors" after "cancellations" and substituted "those" for "such" after "after" in subdivision (c); and deleted ", with the written consent of the district attorney" after "ten dollars ($10)" in subdivision (d). Stats. 2011, Ch. 352 (SB 948), in effect January 1, 2012, added "by an amount greater than ten dollars ($10)" after "the roll" in the first sentence of subdivision (b) and substituted "a" for "the" after "case, where" in the first sentence of subdivision (d).

5098. Court actions; refunds. [Repealed by Stats. 2003, Ch. 471 (SB 1062), in effect January 1, 2004.]

5098.5. Court actions; interest. [Repealed by Stats. 2003, Ch. 471 (SB 1062), in effect January 1, 2004.]

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5098.6. Court actions; refunds. [Repealed by Stats. 1984, Ch. 1261, in effect January 1, 1985.]

5099. Other revenue districts, etc. The refund ordered by the board of supervisors may include county taxes and taxes collected by county officers for a city or revenue district.

History.—Stats. 1941, p. 2114, in effect September 13, 1941, added "ordered by the board of supervisors" after "refund" and substituted "County taxes and taxes collected by county officers for a city or revenue district" for "Amounts levied for any revenue district" in subsection (b). Stats. 1957, p. 769, in effect September 11, 1957, deleted "(a) A portion of amounts paid to the State Treasurer by the county treasurer as money belonging to the State (b)" after "include" and combined the introductory provision with former subsection (b).

5100. Settlement with State. The part of the refund representing amounts paid to the State shall be paid from the county general fund and, when the auditor renders the report which he is required to make to the Controller showing the amount due the State as of the last day of the month preceding the settlement which the county treasurer is required to have with the Controller, the auditor shall certify this amount refunded to the Controller, in the form prescribed by the Controller. On the next settlement of the county treasurer with the State, the Controller, if satisfied of the legality of the refund, shall give the county treasurer credit for the State's portion of the refund.

5101. Revenue districts' liability. Refunds ordered by the board of supervisors under this article in respect of county taxes shall be paid by warrant drawn upon the appropriate fund by the county auditor. Refunds ordered in respect of revenue districts, except chartered cities, may be paid by a warrant drawn by the county auditor, upon such available funds, if any, as the revenue district may have on deposit in the county treasury, or in the event such funds are insufficient, then out of funds subsequently accruing to such revenue district and on deposit in the county treasury. Refunds ordered in respect of chartered cities shall be paid in the manner provided for their payment in the charter or ordinances of the city. Neither any county nor its officers shall refund amounts on behalf of a revenue district from county funds.

History.—Stats. 1941, p. 2114, in effect September 13, 1941, revised provisions relating to revenue districts and added provisions relating to counties and chartered cities.

Merger in judgments.—The above provisions merge in and become part of any judgment allowing a refund. Los Angeles County v. Superior Court, 17 Cal.2d 707.

5102. Unclaimed amounts. If any payment may be refunded under this article and no claim is filed within the time allowed, the payment may be transferred to the county general fund on order of the board of supervisors.

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5103. Refunds by holders of tax certificates. [Repealed by Stats. 1996, Ch. 699, in effect January 1, 1997.

5103. Refunds as tax credits. Notwithstanding any other provision of law, a taxpayer and the county or city and county may enter into a written settlement agreement to substitute credits against a taxpayer's future tax liabilities for the payment by the county or city and county to that taxpayer of refunds of tax and any interest accrued thereon. Interest may continue to accrue upon a substituted credit until that credit has been fully offset against future tax liabilities. The authority of a county or city and county to provide for tax credits in accordance with this section shall be vested in that branch of the county or city and county government that is authorized to settle legal disputes on behalf of the county or city and county.

History.—Added by Stats. 1998, Ch. 87 (SB 30), in effect January 1, 1999.

5104. Reduction in value refunds; payee. Any refund of taxes or assessments authorized pursuant to this article as a result of a reduction in the value of taxable property or as a result of corrections to the roll or cancellations after taxes or assessments were paid, may be paid to the latest recorded owner of that property as shown on the tax roll, rather than to the individual or entity who paid the amount of tax or assessment to be refunded, if both of the following conditions are met:

(a) There has been no transfer of the property during or since the fiscal year for which the taxes subject to refund were levied.

(b) The amount of the refund is less than five thousand dollars ($5,000).

History.—Added by Stats. 1996, Ch. 346, in effect January 1, 1997. Stats. 2003, Ch. 199 (SB 1063), in effect January 1, 2004, added "or assessments" after "refund of taxes", added "or as the result of corrections to the roll or cancellations after taxes or assessments were paid," after "of taxable property", and added "or assessment" after "amount of tax" in the first sentence of the first paragraph, and designated former subsections (1) and (2) as subsections (a) and (b), respectively, therein.

5106. Recovery of penalties, interest and costs. Where the taxes sought to be refunded or recovered have been paid after delinquency, the amount of penalties, interest or costs refundable or recoverable under this article shall be computed only on the taxes refunded or recovered.

History.—Added by Stats. 1941, p. 2116, in effect September 13, 1941.

5107. "Taxes" defined. As used in this article, "tax" or "taxes" includes penalties, interest, and costs.

History.—Added by Stats. 1941, p. 2116, in effect September 13, 1941.

Construction.—A penalty which is created by statute for failure to pay a tax assessment becomes part of the tax. IBM Personal Pension Plan v. City and County of San Francisco, 131 Cal.App.4th 1291.

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5108. Interest payable. [Stats. 1976, Ch. 499, p. 1240, in effect January 1, 1977, renumbered the section as Section 5151.]

5108. Economic revitalization manufacturing property—property tax rebate. (a) For the 1994–95 fiscal year and each fiscal year thereafter, the governing body of a local agency shall have the authority, by a majority vote of that governing body, to rebate some or all of the property tax revenue that the local agency would receive from economic revitalization manufacturing property for a period of five fiscal years from the date the property was placed in service. For purposes of this section, a redevelopment agency shall obtain the approval, by a majority vote of the governing bodies of the city and the county in which the redevelopment agency is located, prior to having the authority to rebate some or all of that property tax revenue.

(b) For purposes of this section:

(1) "Economic revitalization manufacturing property" means tangible personal property that meets all of the following requirements:

(A) The property is directly involved in the manufacturing process in this state, and not in a preliminary or subsequent activity, or one incidental to manufacturing.

(B) Use of the property will lead to the creation of at least 10 new full-time manufacturing jobs or positions at salary levels of at least ten dollars ($10) per hour (twenty thousand dollars ($20,000) per year), and those jobs or positions will continue in existence for a continuous five-year period.

(C) A majority of the governing body of the local agency makes a finding, in its sole discretion, that the property is used in conjunction with the establishment or expansion of a manufacturing project or facility within the local agency's jurisdiction, and that the property meets the requirements of subparagraphs (A) and (B). In this connection, a majority of the governing body is hereby authorized, but not required, to make the finding specified herein, and thereby authorize the rebate provided pursuant to this section.

(D) The property is "qualified property" for purposes of the manufacturing investment credit under subdivision (d) of Sections 17053.49 and 23649.

(2) "Manufacturing process" means the activity of converting or conditioning property by changing the form, composition, quality, or character of the property for ultimate sale at retail or use in the manufacturing of a product to be ultimately sold at retail.

(3) "Ten or more new employees" means a net increase by 10 or more of the total number of employees, as defined in Section 621 of the Unemployment Insurance Code, employed by the taxpayer in this state. The increase in the total number of employees employed in this state shall be determined by subtracting the total number of employees the taxpayer employed in the previous fiscal year from the total number of employees the taxpayer employed in the current fiscal year. The total number of employees employed in this state shall equal the sum of both of the following:

(A) The total number of hours worked by employees in this state for the taxpayer who are paid an hourly wage divided by the applicable hours per workyear.

(B) The total number of months worked by salaried employees in this state for the taxpayer divided by the applicable months per workyear.

(4) "Applicable workyear" means with respect to a worker paid an hourly wage, 2,000 paid hours and, with respect to a salaried employee, a total of 12 paid months. The applicable workyear, in the case of a manufacturing project or facility that becomes operational during the year, shall be the amounts in the foregoing sentence multiplied by a fraction, the numerator of which is the number of months of the year that the project or facility was operational and the denominator of which is 12.

An employee shall be deemed to be employed at a manufacturing project or facility if he or she utilizes the project or facility as his or her principal place of business.

(5) "Local agency" means a city, county, city and county, redevelopment agency, or special district, excluding any school district.

(c) If at any time within five years after granting a rebate pursuant to this section, the governing body finds that the recipient taxpayer has not complied with the conditions of paragraph (1) of subdivision (b), the governing body may recapture from that taxpayer all or any portion of the amount rebated.

(d) This section shall apply only to property that is placed in service on or after January 1, 1994.

(e) (1) On or before January 1, 2002, the Legislative Analyst shall prepare a report for the Legislature, which shall include, but not be limited to, the following information with respect to this section:

(A) A list of local agencies that have utilized the tax rebate provisions.

(B) The dollars expended by each agency utilizing the tax rebate provisions.

(C) The number of jobs created by each of the local agencies utilizing the tax rebate provisions.

(D) A reasoned estimate of the number of jobs created that, but for these provisions, would have been located outside the state.

(E) A reasoned estimate of the number of jobs that, but for these provisions, would have been located in another jurisdiction within the state.

(2) By granting this tax rebate, the granting agency agrees to cooperate fully with the Legislative Analyst.

(3) Beginning in 2000, each participating agency shall provide the Legislative Analyst annually with a complete set of data for the program, including all of the information required in paragraph (1).

(4) The final report by the Legislative Analyst, provided pursuant to paragraph (1), shall include an analysis of the cost per job of jobs created pursuant to this section, a comparison of this program to other economic development tools, and a recommendation as to whether this program should be continued in its present form, restructured, or eliminated.

(f) A local agency may enter into an agreement with a taxpayer to implement this section and the agreement shall be valid notwithstanding the subsequent repeal of this section.

(g) Nothing in this section shall be deemed to eliminate or reduce the obligation of a redevelopment agency to comply with Section 33334.2, 33334.6, 33607.5, or 33607.7 of the Health and Safety Code.

(h) This section shall remain in effect only until January 1, 2003, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2003, deletes or extends that date.

History.—Added by Stats. 1993, Ch. 868, in effect January 1, 1994. Stats. 1995, Ch. 204, in effect January 1, 1996, added the second sentence in subdivision (a); substituted "a net" for "an" after "means" in paragraph (3), and added "redevelopment agency," after "city and county," in paragraph (5) of subdivision (b); and added subdivisions (f) and (g). Stats. 1999, Ch. 274 (SB 943), in effect January 1, 2000, added paragraph (D) to subdivision (b) (1); substituted "workyear" for "work year" in subdivision (b)(3)(A) and (B) and in subdivision (b)(B)(4); substituted subdivision (e) for former subdivision (e), which provided that the section would remain in effect only until January 1, 2000; and added subdivision (h).

Note.—Section 1 of Stats. 1993, Ch. 868, provided that the Legislature finds and declares the following:

(a) Tax incentive proposals, when specifically targeted and carefully drawn up, may be a significant force in spurring economic development in California. The Legislature has found in its meetings with California businesses from across the state that tax incentives may assist in retaining business expansion and job growth in California.

(b) Any effective economic development proposal must be meaningful to the target company; that is, it must be targeted and of sufficient magnitude to make a difference in the decisionmaking process of a company to locate or relocate its operations.

(c) The personal property tax, particularly for high-tech manufacturing facilities, is one of the largest fixed costs that must be faced by companies. Moreover, it is highest exactly at the point where factories are their least profitable—at the outset when most factories are operating at a loss. Several states address this problem by "phasing in" personal property taxes on new manufacturing facilities. The Legislature believes such a system would be beneficial to California's economic development.

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Article 2. Refund Actions by Taxpayers*

* Article 2 was added by Stats. 1976, Ch. 499, p. 1240, in effect January 1, 1977.

5140. Action for refund. The person who paid the tax, his or her guardian or conservator, the executor of his or her will, or the administrator of his or her estate may bring an action only in the superior court, but not in the small claims division of the superior court, against a county or a city to recover a tax which the board of supervisors of the county or the city council of the city has refused to refund on a claim filed pursuant to Article 1 (commencing with Section 5096) of this chapter. No other person may bring such an action; but if another should do so, judgment shall not be rendered for the plaintiff.

History.—Stats. 1979, Ch. 730, in effect January 1, 1980, operative January 1, 1981, added "or conservator" after "guardian" in the first sentence. Stats. 1990, Ch. 992, in effect January 1, 1991, added "or her" after "his" throughout text and added "only" after "action" in the first sentence. Stats. 2007, Ch. 340 (AB 1745), in effect January 1, 2008, added ", but not in the small claims division of the superior court," after "the superior court" in the first sentence.

Note.—Section 14.5 of Stats. 1976, Ch. 499, p. 1244, provided no payment by state to local governments because of this act. Sec. 15 thereof provided that the provisions of this act shall be operative with respect to taxes which become due and payable on or after the lien date in 1977.

Construction.—Only the person who has actually paid the tax may bring action for refund. This section does not affect the determination of what property is taxable and what property is exempt. It merely sets forth the procedure for refunding taxes improperly collected. Mayhew Tech Center, Phase II v. Sacramento County, 4 Cal.App.4th 497.

Construction.—Failure to follow the correct procedural rules can result in forfeiture of the power to enforce the constitutional right to a refund. IBM Personal Pension Plan v. City and County of San Francisco, 131 Cal.App.4th 1291. Section 5140 applies to actions for refund of fraud penalties imposed under Sections 503 and 504 of the Revenue and Taxation Code as well as actions for refund of taxes. Id.

Construction.—Where a lessee under a 55-year lease filed an action against the county seeking a refund on property taxes paid, the Court of Appeal concluded that the lessee had standing to pursue the refund claim under Sections 469(b)(3), 1603(f), and 5140 of the Revenue and Taxation Code. As a tenant under a long-term lease that extended over 35 years and the party who paid the property taxes for the years at issue, the lessee was considered the beneficial owner of the property for property tax purposes and an affected party. Los Angeles County v. Raytheon Co., 159 Cal.App.4th 27.

Real parties in interest barred from bringing refund action.—Real parties in interest, such as a pension plan lacked standing to file an action for refund of property taxes and penalties paid by the trustee of the plan on its behalf; although the plan was the real party in interest as to the taxes paid by trustee, the plan's failure to pay the taxes barred it from bringing refund action. IBM Personal Pension Plan v. City and County of San Francisco, 131 Cal.App.4th 1291.

Exhaustion of administrative remedies.—A partner in a cable television partnership was not precluded from bringing an action against a county seeking judicial relief from an assessment appeals board decision even though it was not an applicant in the board proceedings. The board treated the partner as if it were an applicant, the decision listed it in the caption and designated it as one of the applicants, the county never objected to the board's characterization of the partner as an "applicant", and the county itself referred to the partner as an applicant. The policies underlying the exhaustion requirement were fully satisfied even though the partner was not a formal applicant in the proceeding before the board. CAT Partnership v. Santa Cruz County, 63 Cal.App.4th 1071. The doctrine provides that when an administrative remedy is provided by statute, relief must be sought from the administrative body and this remedy exhausted before the courts will act. The doctrine prevents interference with the subject matter jurisdiction of another tribunal when an administrative tribunal was created by law to adjudicate the issue sought to be presented to the court and the claim is within the special jurisdiction of the administrative tribunal. Plaza Hollister Limited Partnership v. San Benito County, 72 Cal.App.4th 1.

Mandamus.—Administrative mandamus, Cal. Civil Code, sec. 1094.5, does not lie to review the validity of a decision before the assessment appeals board. Mystery Mesa Christian Church, Inc. v. Assessment Appeals Bd. No. 1, 63 Cal.App.3d 37. A petition for writ of mandate under Code of Civil Procedure Section 1086, is not available to obtain review of an appeals board's assessment decision on the merits (as distinguished from, for example, review of its ministerial duties). Mandate is proper only when there is no adequate remedy at law, and taxpayer had a remedy at law in the form of a tax refund action. Schoenberg v. County of Los Angeles Assessment Appeals Board (2009) 179 Cal. App. 4th 1347.

Class action.—Taxpayer had no standing to bring a class action for refund because such actions are not authorized unless specifically provided for by statute. This section does not provide for a class action. Neecke v. City of Mill Valley, 39 Cal.App.4th 946.

Standing when tax paid by other than assessee.—Lessor has standing under Revenue and Taxation Code Section 5140 to bring a refund action because it paid a lessee's property tax as an authorized payer in accordance with Revenue and Taxation Code Section 2910.7. It is irrelevant whether the lessor, a state entity that is itself exempt from property tax, acted as a volunteer in paying the lessee's property tax. California State Teachers’ Retirement System v. County of Los Angeles (2013) 216 Cal.App.4th 41.

Decisions Under Former Section 5098, Court Actions.

Payment by lessee.—A lessor may not recover taxes paid upon his property by the lessee pursuant to the provisions of the lease. Easton v. Alameda County, 9 Cal.2d 301.

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5141. Action for refund; limitation. (a) An action brought under this article, except an action brought under Section 5148, shall be commenced within six months from and after the date that the board of supervisors or city council rejects a claim for refund in whole or in part.

(b) Except as provided in subdivision (c), if the board of supervisors or city council fails to mail notice of its action on a claim for refund within six months after the claim is filed, the claimant may, prior to mailing of notice by the board of supervisors or city council of its action on the claim, consider the claim rejected and bring an action under this article.

(c) If an applicant for the reduction of an assessment states in the application that the application is intended to constitute a claim for refund pursuant to Section 5097, the claim for refund shall be deemed denied on the date the final installment of the taxes extended on such assessment becomes delinquent or on the date the equalization board makes its final determination on the application, whichever is later.

History.—Stats. 1978, Ch. 1188, in effect September 26, 1978 added subdivision designations and inserted subdivision (b). Stats. 1987, Ch. 1262, in effect January 1, 1988, added ", except an action brought under Section 5148," after "article" in subdivision (a).

Construction.—While subdivision (a) imposes a limitations period of six months from the date the public entity rejects a refund claim, subdivision (b) provides only that when the entity fails to act on the refund claim for more than six months, the statute of limitations does not begin to run until the entity denies the claim or the claimant elects to consider the claim rejected and file an action. Thus, subdivision (b) permits, but does not require, a claimant to deem its claim denied. It cannot be read to mandate a limitations period of six months after the public entity fails to act on the refund claim. Geneva Towers Ltd. Partnership v. City and County of San Francisco, 29 Cal.4th 769. A county is an essential defendant in a tax refund action against it. The complaint for a refund of taxes was not timely filed against the county because the six-month statute of limitations of Section 5141 had expired before the taxpayer added the county as a defendant. Schoenberg v. County of Los Angeles Assessment Appeals Board (2009) 179 Cal. App. 4th 1347.

5142. Necessity of refund claim. (a) No action shall be commenced or maintained under this article, except under Section 5148, unless a claim for refund has first been filed pursuant to Article 1 (commencing with Section 5096).

No recovery shall be allowed in any refund action upon any ground not specified in the refund claim.

(b) When the person affected or his or her agent and the assessor stipulate that an application involves only nonvaluation issues, they may file a stipulation with the county board of equalization stating that issues in dispute do not involve valuation questions. To the extent possible, the stipulation shall also indicate the parties' agreement as to the assessment amounts that would result under their respective positions on the issue or issues in dispute. The board shall accept or reject the stipulation, with or without conducting a hearing on the stipulation. The filing of, and the acceptance by the board of, a stipulation shall be deemed compliance with the requirement that the person affected file and prosecute an application for reduction under Chapter 1 (commencing with Section 1601) of Part 3 in order to exhaust administrative remedies. However, the filing of, and the acceptance by the board of, a stipulation under this subdivision shall not excuse or waive the requirement of a timely filing of a claim for refund.

(c) Nothing in this subdivision shall be construed to deprive the county board of equalization of jurisdiction over nonvaluation issues in the absence of a contrary stipulation.

History.—Stats. 1987, Ch. 1262, in effect January 1, 1988, added ", except under Section 5148," after "article", and deleted "of this chapter" after "(commencing with Section 5096)" in the first paragraph. Stats. 1993, Ch. 387, in effect January 1, 1994, added subdivision letter "(a)" before "No action" in the first sentence of the first paragraph; substituted "refund" for "such" after "in any" and added "refund" after "in the" in the first sentence of the second paragraph; and added subdivision (b).

Construction.—A claim for refund which stated that the assessor was "departing from established concepts of uniformity" was sufficient to raise an equal protection issue with respect to the appraisal issues under attack. Schoderbek v. Carlson, 152 Cal.App.3d 1027. Taxpayer's use of the standard refund claim form provided by the county, attachment of a letter wherein county counsel acknowledged that taxpayer would file appeals or litigate the disputed assessments for the years at issue, and attachment of a document that detailed taxpayer's belief that the assessor's method of base year valuation was incorrect were together, detailed enough to put the county on notice that the claims involved the incorrect method of assessment of the initial base year value of its possessory interest, which is within the purview of Section 51.5. Metropolitan Culinary Services, Inc. v. Los Angeles County, 61 Cal.App.4th 935. A stipulated judgment between a county and a property taxpayer was void to the extent that it retroactively applied a reduction in base-year value resulting from an assessment appeal to assessment years predating the assessment appeal. Subdivision (a)(5) provides that any reduction in assessment made as the result of an appeal under the statute applies for the assessment year in which the appeal is taken and prospectively thereafter. Plaza Hollister Limited Partnership v. San Benito County, 72 Cal.App.4th 1.

Refund Amount.—A taxpayer who files a refund action can recover no more than the amount claimed in his underlying claim for refund. Thus, where taxpayers did not seek a refund based on the lower property values that they had submitted in their applications for reduction in assessments to the assessment appeals board, under this section and Section 5143, they could only file suit to recover, and the trial court could only award, the amount claimed in their claim for refund. Mission Housing Development Company v. San Francisco, 81 Cal.App.4th 522.

Class Action.—Plaintiffs lacked standing to maintain the action where they failed to allege that they had exhausted their administrative remedies by applying for and being denied relief by the county board of equalization or assessment appeals board. The named plaintiffs could have filed a claim for refund on behalf of themselves and on behalf of the members of the class. Schoderbek v. Carlson, 113 Cal.App.3d 1029.

Decisions Under Former Section 5104, Claim for refund required.

Application of section.—An action by a security interest holder to recover taxes paid by it in connection with personal property it had possessed and controlled following default on a security agreement is one for refund of taxes "erroneously or illegally collected", subject to the provision of the section which makes a claim for refund mandatory. Chrysler Credit Corp. v. Ostly, 42 Cal.App.3d 663.

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5143. Scope of action for refund. If a claim for refund relates only to the validity of a portion of an assessment, an action may be brought under this article only as to that portion.

5144. Scope of judgment. If the court finds that an assessment is void in whole or in part, it shall render judgment for the plaintiff for the amount of the taxes paid on that portion of the assessment that is found to be void. The taxes paid on the portion of the assessment not found to be void shall constitute valid taxes which, if paid after delinquency, shall carry penalties, interest, and costs.

Construction.—The use of the term "void" in this section corresponds in meaning with the term "validity" used in Revenue and Taxation Code Section 5143, implying that "void" refers to any taxes which are invalid. An invalid tax means any assessment which a taxpayer is not legally responsible for paying. Norby Lumber Company, Inc. v. Madera County, 202 Cal.App.3d 1352.

Judicial Review.—Against a claim that a valid valuation method has been applied erroneously, the Board's decision is equivalent to a trial court determination, and the court may review only the record presented to the Board and may overturn the Board's decision only when no substantial evidence supports it. Where a taxpayer challenges the validity of a valuation method itself, the court must determine as a question of law whether the challenged method is arbitrary, in excess of discretion, or in violation of standards prescribed by law. ITT World Communications, Inc. v. Santa Clara County, 101 Cal.App.3d 246. If the local board of equalization has used an improper method of value or has failed to use proper criteria in valuing the property, and there is no evidence or there is a conflict in the evidence from which a proper value can or should be made, the trial court must remand the matter to the local board for further proceedings. The constitutional responsibility to assess falls to the local board, not to the courts. Norby Lumber Company, Inc. v. Madera County, 202 Cal.App.3d 1352.

When reviewing an equalization determination properly before it in a property tax refund action, a court may correct an assessment and grant a tax refund if value is calculable as a matter of law without remanding to the county board of equalization. However, when judgment must still be exercised as to value, a remand to the local board of equalization is required. Accordingly, to the extent a stipulated judgment between a taxpayer and a county in a tax refund action represented an exercise of judgment as to value, it improperly invaded the constitutional authority of the board of equalization and granted relief which the court had no authority to grant under any circumstances. Plaza Hollister Limited Partnership v. San Benito County, 72 Cal.App.4th 1.

Decisions Under Former Section 5103, Court action authorized.

Judicial review.—The current standard of judicial scrutiny consists of arbitrariness, abuse of discretion or failure to follow the standards prescribed by the Legislature. When a taxpayer challenges the erroneous application of a valid method of appraisal, a court may review only the record of the equalization hearing to determine whether there is substantial evidence to support the decision. When the challenge is to the validity of the method, per se, the court is faced with a question of law which invokes the current standard. Bret Harte Inn, Inc. v. San Francisco, 16 Cal.3d 14.

City taxes collected by county.—Where recovery is sought of city taxes only which were collected by the county, the action may be brought against the county as well as the city. Southwest Exploration Co. v. Orange County, 44 Cal.2d 549.

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5145. Action for refund after payment of first installment. (a) Not-withstanding the fact that all taxes on property have not been paid in full, the owner of that property may bring an action under Section 5140 at any time within six months after the rejection of a claim for the first installment under an installment plan of redemption pursuant to Article 2 (commencing with Section 4216) of Chapter 3 of Part 7, if the following requirements are satisfied:

(1) The first installment payment is made within six months of the delinquency of the taxes being paid by installments.

(2) If the balance of the unpaid tax liability remaining after the first installment payment has been made, plus penalties and interest thereon to the date of filing the actions, exceeds 662/3 percent of the full value of the property on which the taxes are a lien, as of the last equalized assessment roll, the taxpayer shall post a bond with the county tax collector in a sum equal to that excess or, in the alternative, pledge other property with the county tax collector in that amount as security. The requirement for a bond or additional security specified in this paragraph shall terminate when the balance of unpaid tax liability remaining after a subsequent installment payment, plus penalties and interest thereon to the date of such subsequent installment payment, no longer exceeds 662/3 percent of the full value of the property on which the taxes are a lien, as of the last equalized assessment roll. However, a new bond shall be posted or property pledged if, during the pendency of the action, the balance of unpaid tax liability, plus penalties and interest thereon, again exceeds 662/3 percent of the full value.

(b) The right to maintain an action under this section shall terminate if there is a default of any obligation by the owner in the installment plan of redemption on the property.

(c) If the owner does not recover the amount of taxes in dispute in an action brought under this section, he or she shall pay additional interest to the county or city equal to the difference between the interest he or she has paid under Article 2 (commencing with Section 4216) of Chapter 3 of Part 7 and the amount of interest the county or city would have earned on the funds in the impound account on the entire amount of tax determined by the court to be due, if such amount had been paid in equal installments on the tax delinquency dates.

History.—Stats. 1983, Ch. 1281, in effect September 30, 1983, deleted "of this division" after "Part 7" in subdivisions (a) and (c), added "or she" after every "he" in subdivision (c), and made grammatical corrections throughout the section.

5145.5. Action for refund after payment of first installment; escape assessments. (a) Notwithstanding the fact that all taxes on a property have not been paid in full, the owner of that property may, subject to the limitations set forth in subdivision (d), bring an action in accordance with Section 5140 at any time within six months after the rejection of a claim for the refund of the first installment that is paid under an installment plan for payment of escape assessments that is entered into pursuant to Section 4837.5.

(b) The right to maintain an action pursuant to this section shall terminate if there is a default on the part of the assessee with respect to any obligation in the installment plan for payment of the escape assessment.

(c) If the owner does not recover the amount of taxes in dispute in an action brought under this section, he or she shall pay additional interest to the county or city in an amount equal to the difference between the amount of interest he or she has paid under Section 506 and the amount of interest that the county or city would have earned in the impound account in connection with the entire amount of tax determined by the court to be due if that amount had been paid prior to delinquency.

(d) (1) This section shall not apply in cases where the penalty pursuant to Section 503 has been added to the escape assessment and upheld by the appeals board or the county board of equalization.

(2) This section shall apply to installment plans initiated by written requests filed with the tax collector on or after July 1, 1997.

History.—Added by Stats. 1997, Ch. 941 (SB 542) in effect January 1, 1998.

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5146. Indispensable parties. If all or any portion of the taxes sought to be recovered were collected by officers of the county for a city or cities, an action must be brought against the county for the recovery of those taxes. When an action is filed against a county for taxes collected by the county on behalf of a city or cities, the county shall give notice of that action to the city or cities within 30 days of the county's receipt of the summons and complaint. A fee shall be payable by the assessee in an amount prescribed by the court to cover the reasonable costs incurred by a county or counties in giving the required notice. Any city receiving notice of the action filed against the county may, within 30 days of the receipt of that notice, intervene in that action. Whether or not a city intervenes in the action, any judgment rendered for an assessee shall be entered exclusively against the county; however, the county shall be entitled to recover separately from the city or cities and other tax entities those taxes collected by the county on behalf of the city or cities and other tax entities which are subject to refund to the assessee as a result of the judgment. Payment to the taxpayer upon the judgment and any interest thereon may be deferred by the county until the apportionment of property tax revenue next following the date of the judgment, or as the county and the taxpayer may otherwise agree. Interest shall accrue during any deferral period unless the county and taxpayer otherwise agree. The county may if it chooses to do so offset the amount of the judgment and interest recoverable by it from the city or cities and other tax entities against amounts held in the county treasury therefor or against amounts due and payable thereto, including, but not limited to, property tax apportionments. The amount of the fee required by this section shall not be recoverable by the assessee in the action and no judgment entered in the action in favor of the assessee shall provide for the recovery of the fee.

As used in this section, "county" includes a city and county.

If all or any portion of the taxes sought to be recovered were levied on state-assessed property, property which the board has found ineligible for the welfare exemption pursuant to Section 254.5, or property as to which the board has reviewed the assessment pursuant to Section 11 of Article XIII of the Constitution, the board shall be joined as a party to the action.

History.—Stats. 1987, Ch. 1262, in effect January 1, 1988, renumbered the section which was formerly numbered 5148; added "or cities" after "city", substituted "county" for "city" after "against the", substituted "those" for "such" after "recovery of" and deleted "and judgment must be sought against the city" after "taxes" in the first sentence of the first paragraph; deleted the former second sentence which provided "Where actions are brought against both a county and a city such actions may be joined in one complaint"; added the second, third, fourth, fifth, sixth, seventh, eighth, and ninth sentences to the first paragraph; added the second paragraph; and substituted "any portion" for "part" after "all or", and deleted "of the Revenue and Taxation Code" after "pursuant to" in the third paragraph.

Construction.—In an action seeking refund of taxes levied by a city and collected by a county on the city's behalf, this Section requires that a judgment rendered for a taxpayer be entered exclusively against the county. Howard Jarvis Taxpayers Association v. Orange County, 110 Cal.App.4th 1375.

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5147. Failure to return summons; dismissal. (a) No refund action hereafter commenced shall be further prosecuted, and no further proceedings shall be had therein, and any refund action hereafter commenced shall be dismissed by the court in which the action was commenced, on the court's own motion or on the motion of any defendant therein, unless the summons was issued and served and the return thereon was made within one year after the commencement of the action, except where the parties have filed a stipulation in writing that the time may be extended or the party against whom the action is prosecuted has made a general appearance in the action.

(b) For purposes of this section, none of the following constitutes a general appearance in the action:

(1) A stipulation pursuant to Section 583.230 of the Code of Civil Procedure extending the time within which service must be made.

(2) A motion to dismiss made pursuant to this chapter, whether joined with a motion to quash service or a motion to set aside a default judgment, or otherwise.

(3) An extension of time to plead after a motion to dismiss made pursuant to this chapter.

History.—Stats. 1990, Ch. 126, in effect June 11, 1990, added "(a)", substituted "refund" for "such" after "No", substituted "any refund action" for "all such actions" after "therein, and", substituted "shall" for "must" after "commenced", substituted "action was" for "same shall have been" after "which the", substituted "the court's" for "its" after "on", deleted comma after "own motion", added comma after "thereon", substituted "the" for "said" after "commencement of", and added "or the party . . . the action" after "extended" in subdivision (a), and added subdivision (b).

Construction.—The right to seek dismissal of action on the basis of an untimely return of summons is waived where the filing of answers and the participating in discovery indicate an intent to submit the issues in the action to a trial on the merits. Synanon Foundation, Inc. v. Marin County, 133 Cal.App.3d 607. Dismissal of action is proper where summons was not returned timely, even though County made a general appearance by filing an answer one month after complaint was filed. There is no "general appearance" exception to the one-year service and return requirement. Ford Motor Co. v. Tulare County, 145 Cal.App.3d 688. Dismissal of action is proper where summons was not returned timely, even though county filed a motion to transfer the action to superior court two months after the filing of the complaint and waited two months following the one-year period before filing its motion for dismissal. Emberton v. San Diego County, 186 Cal.App.3d 268. The "general appearance" exception to the one-year service and return requirement applies to motions to dismiss under this section, even though the section does not contain an express provision for such an exception. Southern Pacific Transportation Co. v. State Board of Equalization, 175 Cal.App.3d 438.

5148. Action for refund; state-assessed property. Notwithstanding Section 5140, an action to recover taxes levied on state-assessed property arising out of a dispute as to an assessment made pursuant to Section 721, including a dispute as to valuation, assessment ratio, or allocation of value for assessment purposes, shall be brought under this section. In any action brought under this section, the following requirements shall apply:

(a) The action shall be brought by the state assessee. There shall be a single complaint with all parties joined therein with respect to disputes for any year.

(b) The action shall name the board and the county or counties. When a county is named which collected taxes on behalf of a city or cities, the county shall give notice of that action to the city or cities within 30 days of receipt of advice from the board of the action. A fee shall be payable by the state assessee in an amount prescribed by the court to cover the reasonable costs incurred by a county or counties in giving that notice. Any city receiving notice of the action filed against the board and the county may, within 30 days of the receipt of that notice, intervene in that action. Whether or not a city intervenes in the action, any judgment rendered for an assessee shall be entered exclusively against the county; however, the county shall be entitled to recover separately from the city or cities and other tax entities those taxes collected by the county on behalf of the city or cities and other tax entities which are subject to refund to the assessee as the result of the judgment. Payment to the taxpayer upon the judgment and any interest thereon may be deferred by the county until the apportionment of property tax revenue next following the date of the judgment, or as the county and the taxpayer may otherwise agree. Interest shall accrue during any deferral period unless the county and taxpayer otherwise agree. The county may if it chooses to do so offset the amount of the judgment and interest recoverable by it from the city or cities and other tax entities against amounts held in the county treasury therefor or against amounts due and payable thereto, including, but not limited to, property tax apportionments. The amount of the fee required by this section shall not be recoverable by the assessee in the action and no judgment entered in the action in favor of the assessee shall provide for the recovery of the fee.

As used in this section, "county" includes a city and county.

(c) Service of the summons and complaint shall be only upon the board. The board shall serve as agent of the defendant county or counties for the purpose of service of process. A fee shall be payable by the state assessee in an amount prescribed by the court to recover all reasonable costs incurred by the board while acting in its capacity as agent for the defendant counties.

(d) Venue of the action shall be in any county in which the Attorney General of California has an office or in which the state assessee has a significant presence.

(e) The action shall be limited in the case of valuation and allocation disputes to the grounds specified in the following:

(1) A petition for reassessment filed under Section 741, or any proceeding thereon.

(2) A petition for correction of allocated assessment filed under Section 747, or any proceeding thereon.

(f) A timely filed petition for reassessment or petition for correction of allocated assessment shall constitute a claim for refund if the petitioner states in the petition it is intended to so serve.

(g) The action shall be commenced only after payment of the taxes in issue and within four years after the latest of the dates that the State Board of Equalization mailed its decision or its written findings and conclusions on the following:

(1) A petition for reassessment filed under Section 741 and intended to constitute a claim for refund.

(2) A petition for correction of allocated assessment filed under Section 747 and intended to constitute a claim for refund.

(h) The action shall not be joined with any action filed under Section 5140.

(i) Any refund of tax overpayments and any interest thereon, determined in any action brought under this section to be due shall be made by the defendant county or counties.

History.—Added by Stats. 1987, Ch. 1262, in effect January 1, 1988.

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5149. Counsel for defense of city. [Repealed by Stats. 1987,Ch. 1262, in effect January 1, 1988.]

5149. Precedence over other civil actions. All courts wherein actions brought under this part (with the exclusion of actions brought under Section 5148) are or hereafter may be pending shall give those actions precedence over all other civil actions therein, except actions to which special precedence is given by law, in the matter of setting same for hearing or trial, and in hearing the same, to the end that all those actions shall be quickly heard and determined.

History.—Stats. 1981, Ch. 550, in effect January 1, 1982, substituted "part" for "article" after "under this". Stats. 1987, Ch. 1262, in effect January 1, 1988, renumbered the section which was formerly numbered 5146, and substituted "those" for "such" after "give" and after "all". Stats. 1988, Ch. 1372, in effect January 1, 1989, added "(with the exclusion of action brought under Section 5148)" after "part".

Note.—Section 4 of Stats. 1981, Ch. 850, provided if any section, part, clause, or phrase hereof is for any reason held to be invalid or unconstitutional, the remaining sections, parts, clauses, and phrases shall not be affected but will remain in full force and effect.

5149.5. Recovery of penalties, interest, and costs. Where the taxes sought to be recovered have been paid after delinquency, the amount of penalties, interest or costs recoverable in actions brought under this article shall be computed only on the taxes recovered.

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Article 2.5. Interest on Refunds

5150. Interest on taxes for which recovery allowed. [Repealed by Stats. 1994, Ch. 705, in effect January 1, 1995.]

5150.5. Recovery of interest on penalties. In any action in which the recovery of a penalty assessed pursuant to paragraph (1), (2), or (3) of subdivision (c) of Section 830 is allowed by the court, the plaintiff shall be entitled to interest on the penalties for which recovery is allowed, at the applicable rate or rates in effect from time to time and payable on a refund of tax, as provided in Section 5151. This interest shall be payable from the date of filing of the claim for refund, but in no event earlier than the date of payment of the penalty or installments thereof sought to be refunded, to the date of entry of judgment. This accrued interest shall be included in the judgment.

History.—Added by Stats. 1985, Ch. 1091, effective January 1, 1986. Stats. 1994, Ch. 705, in effect January 1, 1995, substituted "5151" for "5150" after "provided in Section" in the first sentence. Stats. 2011, Ch. 352 (SB 948), in effect January 1, 2012, substituted "(c)" for "(a)" after "of subdivision" and added a comma after "refund of tax" in the first sentence.

5151. Other interest payable. (a) Interest at the greater of 3 percent per annum or the county pool apportioned rate shall be paid, when that interest is ten dollars ($10) or more, on any amount refunded under Section 5096.7, or refunded to a taxpayer for any reason whatsoever. However, no interest shall be paid under the provisions of this section if the taxpayer has been given the notice required by Section 2635 and has failed to apply for the refund within 30 days after the mailing of that notice. For purposes of this section, "county pool apportioned rate" means the annualized rate of interest earned on the total amount of pooled idle funds from all accounts held by the county treasurer, in excess of the county treasurer's administrative costs with respect to that amount, as of June 30 of the fiscal year preceding the date the refund is calculated by the auditor. For each fiscal year, the county treasurer shall advise the Controller of the county pool apportioned rate, and of computations made in deriving that rate, no later than 90 days after the end of that fiscal year. Any interest paid on a refund at a rate provided for by this subdivision as it read prior to January 1, 2009, shall be deemed to be correct.

(b) The interest rate provided for in subdivision (a) does not apply to interest on refunds of those amounts of tax that became due and payable before March 1, 1993. Interest on refunds of amounts of a qualified tax shall be paid at that rate provided for by this section as it read prior to January 1, 1993. As used in this section, a "qualified tax" means a tax that became due and payable before March 1, 1993, and had not been refunded as of April 6, 1995. This subdivision shall not be construed to affect the interest paid on refunds of those amounts of tax that became due and payable before March 1, 1993, and have been refunded as of April 6, 1995.

(c) (1) The interest computation period shall commence with the date of payment of the tax when any of the following applies:

(A) A timely application for reduction in an assessment was filed, without regard to whether the refund ultimately results from a judgment or order of a court, an order of a board of equalization or assessment appeals board, or an assessor's correction to the assessment roll.

(B) The refund is pursuant to a roll correction resulting from the determination or adjustment by the assessor or a local assessment appeals board of a base year value.

(C) The refund results from a correction to the assessment roll pursuant to Section 4831 or 4876.

(2) Interest on refunds of taxes on property acquired by a public agency in eminent domain shall accrue from the date of recordation of the deed.

(3) In all other cases the interest computation period shall commence on the date of filing a claim for refund or payment of the tax, whichever is later. However, in the event of the granting of property tax relief pursuant to Section 69, 69.3, or 170, interest is not payable on any resulting refund of taxes, provided that payment of that refund of taxes is made within 120 days after the county assessor has sent authorization for the reduction to the county auditor.

(d) The computation of interest shall terminate as of a date within 30 days of the date of mailing or personal delivery of the refund payment.

(e) The interest charged shall be apportioned to the appropriate funds, as determined by the county auditor.

(f) The amendments made to this section by Section 4 of Chapter 801 of the Statutes of 1996 shall apply to all refunds made after January 1, 1997.

History.—Added by Stats. 1970, p. 1255, in effect November 23, 1970. Stats. 1976, Ch. 499, p. 1240, in effect January 1, 1977, renumbered the section which was formerly numbered 5108. Stats. 1978, Ch. 740, in effect September 26, 1978, added "or as a consequence of an assessor's clerical error" after "taxes" in the first sentence of the first paragraph; and added "whichever of the three following dates provides the longest period:". After "computed from" in the first sentence of the second paragraph, deleted "or from" after "refund", and substituted "or a date preceding by 30 days the date of paying the refund." for "provided, however that no interest shall be paid under the provisions of this section if such period of time is 30 days or less" after "property" in subsection (b) thereof. Stats. 1980, Ch. 411, in effect July 11, 1980, operative January 1, 1981, substituted "9 percent" for "6 percent" and deleted "5096.3 or" after "Section" in the first sentence of the first paragraph. Stats. 1982, Ch. 690, in effect January 1, 1983, substituted "using" for "from" and "periods" for "dates" in the first sentence of, added the subsection letters, and substituted subsection (c) for "or a date preceding by 30 days the date of paying the refund" in the second paragraph. Stats. 1983, Ch. 737, in effect January 1, 1984, substituted "that" for "such" after "when", substituted "any amount" for "amounts" after "on", deleted "clerical" after "assessor's", and added ", or as the result . . . assessee" after "error" in the first sentence, and substituted "that" for "such" after "mailing of" in the second sentence of the first paragraph; and deleted "three" after "of the" in the first sentence of the second paragraph, and added subsection (d) thereto. Stats. 1992, Ch. 523, in effect January 1, 1993, added "county pool apportioned" after "the", deleted "of 9 percent per annum" after "rate" in the first sentence of the first paragraph; added "For purposes . . . calculated." as the third sentence in the first paragraph; added "that was . . . decision," after "tax roll" in subsection (c). Stats. 1995, Ch. 498, in effect January 1, 1996, added subdivision letter (a) before "Interest at", added "greater of 3 percent per annum or the" after "Interest at the", substituted "to a taxpayer for any reason whatsoever" for "as a result of the reduction of assessed value following an application for equalization by a board of equalization or by a court action to recover taxes, or as a consequence of an assessor's error, or as the result of an incorrect assessment not occasioned by the act or omission of the assessee" after "or refunded" in the first sentence, and substituted "is" for "was" after "the refund" in the third sentence of subdivision (a); added subdivision (b); and added subdivision letter (c) before "Interest allowed", and substituted paragraph numbers (1), (2), (3), and (4) for (a), (b), (c), and (d), respectively, in subdivision (c). Stats. 1996, Ch. 171, in effect July 17, 1996, substituted "county pool apportioned rate" for "county pooled apportioned rate" in the second sentence and added the third sentence commencing with "For each fiscal" of subdivision (a); substituted "The interest rate provided for in subdivision (a)" for "Subdivision (a)" before "does not apply" in the first sentence, substituted "refunds of amounts of a qualified tax" for "refunds of those amounts of tax that became due and payable before March 1, 1993, and have not been refunded as of April 6, 1995," after "interest on" in the second sentence, and added the third sentence commencing with "As used in" of subdivision (b); deleted former subdivision (c) related to determining the interest rate computation period and added new subdivision (c); lettered the former second sentence of former subdivision (c) as subdivision (e); and added subdivision (f). Stats. 1996, Ch. 801, in effect September, 24, 1996, added the second sentence of subparagraph (3) of paragraph (1) of subdivision (c). Stats. 2008, Ch. 329 (AB 2411), in effect January 1, 2009, substituted "fiscal year preceding the date" for "preceding fiscal year for which" after "June 30 of the" and added "by the auditor" after "refund is calculated" in the third sentence and added the fifth sentence commencing with "Any interest paid" in the first paragraph of subdivision (a); substituted "applies" for "apply" in the first sentence of paragraph (1) and added "the" after "or payment of" in the first sentence of paragraph (3) of subdivision (c); and substituted "Section 4 of Chapter 801 of the Statutes of 1996" for "the act adding this subdivision" after "this section by" in the first sentence of subdivision (f). Stats. 2012, Ch, 161 (AB 2643), in effect January 1, 2013, substituted "90" for "60" after "later than" in the fourth sentence of subdivision (a).

Note.—Section 19 of Stats. 1995, Ch. 498, stated that the addition of subdivision (b) was declaratory, not a change to, existing law.

Construction.—The de minimus ten dollar ($10) classification scheme of the section is reasonably related to the legitimate state interest of easing administrative burdens, and violates neither the constitutional right to equality of taxation nor the right to equal protection under either state or federal law. Cohan v. Alvord, 162 Cal.App.3d 176. This section and Section 5150 are in pari materia and should be construed harmoniously if reasonably possible. Thus, it must be concluded that this section does not apply when interest is included in a judgment for recovery of taxes but rather, it was intended to provide for inclusion of interest in refunds made directly by the assessing and taxing authorities. So where taxes were due after March 1, 1977, and before March 1, 1981, the interest to be included in the judgment pursuant to Section 5150 was 6 percent, running from the dates the claims for refund were filed. And where postjudgment interest accrued, as the result of Government Code Section 970.1, which provides that Code of Civil Procedure Section 685.010 is inapplicable to money judgments against local governments, the constitutional rate of 7 percent was applicable. Union Pacific Railroad Co. v. State Board of Equalization, 231 Cal.App.3d 983.

Note.—Section 4 of Stats. 2008, Ch. 329 (AB 2411), provided that: (a) The amendments made by this act to Sections 5097 and 5151 of the Revenue and Taxation Code shall not affect any litigation involving property tax refunds pending before January 1, 2009, that assert either of the following:

(1) Claims of miscalculation of interest paid under Section 5151 of the Revenue and Taxation Code.

(2) Claims interposing noncompliance with Section 2635 of the Revenue and Taxation Code to revive property tax refund claims otherwise outside the tax refund limitation period of Section 5097 of the Revenue and Taxation Code.

(b) Nothing in the legislative history of the amendments made by this act shall be construed as any indication of the meaning of the law as it existed prior to the effective date of the amendments made by this act.

Section 5 thereof, provided that: If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.

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5152. Attorney fees and costs. In an action in which the recovery of taxes is allowed by the court, if the court finds that the void assessment or void portion of the assessment was made in violation of a specific provision of the Constitution of the State of California, of this division, or of a rule or regulation of the board, and the assessor should have followed the procedures set forth in Section 538 in lieu of making the assessment, the plaintiff shall be entitled to reasonable attorney's fees as costs in addition to the other allowable costs. This section is ancillary only, and shall not be construed to create a new cause of action nor to be in lieu of any other provision of law.

History.—Added by Stats. 1978, Ch. 1188, in effect September 26, 1978.

Construction.—It is a prerequisite to an attorney fee award under this section and Section 538 that a factual finding be made that the reason the assessor did not apply a particular provision was that he or she believed it to be unconstitutional or invalid, not that the assessor believed that the statute or regulation was simply inapplicable. Thus, a finding that the failure of a county to apply provisions of a property tax rule was a matter of a misunderstanding of the law precluded attorneys fees. Phillips Petroleum Co. v. Lake County, 15 Cal.App.4th 180.

Assessment contrary to rule.—An assessor disagreeing with property tax rule 4 should have brought a declaratory relief action against the Board pursuant to this section rather than making an assessment against real property without following the dictates of the rule. Since he did not do so, attorneys fees were properly awarded under this section. Prudential Insurance Co. v. City and County of San Francisco, 191 Cal.App.3d 1142.

5153. Impounded funds—interest payable. Notwithstanding Sections 5150 and 5151, whenever the auditor has impounded revenues pursuant to subdivision (a) of Section 26906.1 of the Government Code and those revenues are ultimately used to provide a refund of tax to the affected taxpayer or taxpayers, interest due to the taxpayer or taxpayers for the period that those funds were impounded shall be calculated and paid at the rate, or rates where the applicable rate fluctuated, earned by the county on those revenues during the period of impoundment.

History.—Added by Stats. 1993, Ch. 387, in effect January 1, 1994.

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Article 3. Action by Public Agency

5161. Action by public agency. (a) Any action to recover taxes pursuant to Article 2 (commencing with Section 5140) by any county, city and county, or municipal corporation shall be brought and tried in any county other than the plaintiff or the county in which the plaintiff is situated and other than the defendant or the county in which defendant is situated.

(b) No judge of the superior court in the plaintiff county or the county in which the plaintiff is situated or in the defendant county or the county in which the defendant is situated shall sit or act in any action brought pursuant to this section.

(1) Any party to or any attorney appearing in any such action may establish such disqualification by an oral or written motion without notice supported by affidavit that the judge before whom such action is pending or to whom it is assigned is disqualified by virtue of this section. Where the judge assigned to or who is scheduled to try the cause or hear the matter is known at least 10 days before the date set for trial or hearing, the motion shall be made at least five days before that date. If directed to the trial of a cause where there is a master calendar, the motion shall be made to the judge supervising the master calendar not later than the time the cause is assigned for trial. In no event shall any judge entertain such motion if it be made after the making of an opening statement by counsel for plaintiff, or if there be no such statement, then after swearing in the first witness or the giving of any evidence or after trial of the cause has otherwise commenced. If the motion is directed to a hearing (other than the trial of a cause), the motion must be made not later than the commencement of the hearing. In the case of trials or hearings not herein specifically provided for, the procedure herein specified shall be followed as nearly as may be.

(2) If such motion is duly presented and such affidavit is duly filed, thereupon and without any further act or proof, the judge supervising the master calendar, if any, shall assign some other judge to try the cause or hear the matter. In other cases, the trial of the cause or the hearing of the matter shall be assigned or transferred to another judge of the court in which the trial or matter is pending or, if there is no other judge of the court in which the trial or matter is pending, the chairman of the judicial council shall assign some other judge to try such cause or hear such matter as promptly as possible. Under no circumstances shall a party or attorney be permitted to make more than one such motion in any one action pursuant to this section; and in actions where there may be more than one plaintiff or similar party or more than one defendant or similar party appearing in the action, only one motion for each side may be made in any one action or special proceeding.

(3) Unless required for the convenience of the court or unless good cause is shown, a continuance of the trial or hearing shall not be granted by reason of the making of a motion under this section. If a continuance is granted, the cause or matter shall be continued from day to day or for other limited periods upon the trial or other calendar and shall be reassigned or transferred for trial or hearing as promptly as possible.

History.—Added by Stats. 1961, p. 4172, in effect September 15, 1961. Stats. 1976, Ch. 499, p. 1243, in effect January 1, 1977, substituted "Article 2 (commencing with Section 5140)" for "Sections 5103 or 5138" in subdivision (a), and deleted "after the drawing of the name of the first juror, or if there be no jury," after "made" in the fourth sentence of subdivision (b)(1).

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Article 3.5. Scope of Judicial Review of Assessments in Refund Actions

5170. Scope of Judicial Review of Assessments in Refund Actions. In suits for the refund of state-assessed property taxes, the trial court shall not be restricted to the administrative record, but shall consider all evidence relating to the valuation of the property admissible under the rules of evidence. The court shall base its decision upon the preponderance of the evidence before it.

History.—Added by Stats. 1988, Ch. 1372, in effect January 1, 1989.

Construction.—This section, by its own terms, applies only to property assessed by the Board pursuant to Article XIII, Section 19 of the Constitution and hence, is inapplicable in suits for refund of local property taxes. Simms v. Pope, 218 Cal.App.3d 472. This section vests the trial court in a tax refund action with the power of independent review, allowing it to consider all evidence relating to the valuation of the property, not just the evidence in the administrative record. Thus, where the trial court exercises the power of independent review, the appellate court must determine, on the entire record, whether substantial evidence supports the trial court's findings as opposed to those of the administrative agency involved. The evidence must be of ponderable legal significance, reasonable in nature, credible, and of solid value. Southern Pacific Pipe Lines, Inc. v. State Board of Equalization, 14 Cal.App.4th 42.

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Article 4. Disputes Over Valuation of State-Assessed Property

5180. Disputes over valuation of state-assessed property. [Repealed by Stats. 2004, Ch. 200 (SB 1880), in effect January 1, 2005.]