State Board of Equalization Announced Today that it Filed an Action in Sacramento County Superior Court to Compel Several County Assessors to Comply with State Law


NR# 47-A
Date: September 30, 2002
Customer & Taxpayer Services Division

State Board of Equalization Announced Today that it Filed an Action in Sacramento County Superior Court to Compel Several County Assessors to Comply with State Law

The State Board of Equalization announced today that it filed an action in Sacramento County Superior Court to compel several county assessors to comply with state law. The assessors have refused to follow a regulation that requires them to reduce assessments for taxpayers that suffered a diminution in the value of their property as a direct result of restricted access to the property for the few days immediately after the terrorist attacks on September 11, 2001. The Board is responsible for assuring that property is assessed uniformly throughout the state, including property eligible for disaster relief, and to adopt regulations that govern the manner in which assessors assess property. State law requires the Board to bring an action in court to compel assessors to follow statutory law and Board regulations when they fail to do so on their own.

The Board's action closely follows an action filed last week in Alameda County Superior Court by several assessors asking the court to declare the Board regulation invalid. It is anticipated that the two separate actions will be consolidated into a single trial.

The Board maintains that the regulation authorizing one-time disaster relief is declaratory of existing law and that county assessors have overestimated the amount of tax relief involved. Only properties located at airports where aircraft and on-site airport related businesses were affected by closure on and after September 11, 2001 qualify for the relief. The assessors' estimates of tax relief are based on the total of all claims filed, including many that do not qualify or are ineligible under the Board regulation. For example, numerous claims were filed for hotels, office buildings, and amusement/theme parks that are ineligible for relief because they are not located on or in airports.

The cost to the counties to provide the required disaster relief is limited by (1) the strict eligibility requirements, (2) the short three to five day time period in which airport closure and restricted access occurred, and (3) the statutory requirements for prorating the value loss. The law specifies that the decline in the taxable value of a property must have been directly caused from the restricted access due to the closure of the airports and must have involved in excess of $5,000 in damage to the property. Some taxpayers simply claimed value loss of 30 to 50 percent, which results in an inflated value loss estimate because it overstates the amount of the relief available under the law and Board regulation.

The Board's action reflects the Legislature's intent to allow tax relief to the owners of property damaged by an unforeseeable catastrophic event. The September 11th terrorist attacks constituted such an event, depriving owners of the right to access or use their airport property for three to five days following the event.

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