Publication 216, The First 100 Years


The Board of Equalization Becomes a Constitutional Agency

In 1876 the Legislature passed a bill calling for a Constitutional Convention. This proposal was ratified by the people, and delegates to this Convention were elected on June 19, 1878. Most of the delegates were determined to eliminate the evils of the prior Constitution; however, their views on how to achieve this objective varied widely. After much debate, particularly in areas of revenue and taxation, the delegates adopted a Constitution on March 3, 1879. A popular election was held and the Constitution was ratified on May 7, 187925.Proponents of the Constitution saw it as an end to inequitable taxation. Opponents viewed it as dangerously socialistic. Time would support neither view. Though the new Constitution did solve many of the ills created by the old Constitution, it was not without problems of its own, many of which would directly affect the newly formed Board of Equalization.

Today’s Board is derived directly from the Constitution of 1879. Article XIII, Section 9, reads:

“A State Board of Equalization, consisting of one member from each congressional district in this State, shall be elected by the qualified electors of their respective districts, at the general election to be held in the year 1879, whose term of office after those first elected shall be for four years, whose duty it shall be to equalize the valuation of the taxable property of the several counties in the State for the purpose of taxation. The Controller of the State shall be ex-officio a member of the Board. The Boards of Supervisors of the several counties of the State shall constitute Boards of Equalization for their respective counties, whose duty it shall be to equalize the valuation of the taxable property in the county for the purpose of taxation; provided, such State and County Boards of Equalization are hereby authorized and empowered, under such rules of notice as the county boards may prescribe, as to the county assessments, and under such rules of notice as the State Board may prescribe, as to the action of the State Board, to increase or lower the entire assessment roll, or any assessment contained therein, so as to equalize the assessment of the property contained in said assessment roll, and making the assessment conform to the true value in money of the property contained in said roll.” 26

Section 10 of Article XIII gave the Board an additional function: assessing the railroads. Some assessors noted difficulty in assessing such properties as railroads. During the Constitutional debates it was alleged that “. . . in many counties the railroad company elects the assessor and as a result assesses its own property.” 27 Much debate ensued with the contesting parties agreeing upon the following compromise:

“All property, except as hereinafter in this section provided, shall be assessed in the county, city, or district in which it is situated, in the manner prescribed by law. The franchise, roadway, roadbed, rails, and rolling stock of all railroads in this State, operated in more than one county, shall be assessed by The State Board of Equalization, at their actual value, and the same shall be apportioned to the counties, cities, towns, townships, and districts in which such railroads are located, in proportion to the number of miles of railway laid in such counties, cities and counties, cities, towns, townships, and districts; and all other property of railroads shall be assessed by the counties in which such property is situated.” 28

This Constitutional provision, which greatly expanded the powers of the Board, was to become a subject of much litigation.

While the Constitution of 1879 authorized the Board of Equalization, it was the Legislature which defined the duties of the Board by an Act of April 3, 1880.29 The duties were defined as follows:

  1. To prescribe rules for its own government and for the transaction of its own business.
  2. To prescribe rules and regulations, not in conflict with the Constitution, nor the laws of the state, to govern Assessors when assessing and Supervisors when equalizing assessments.
  3. To make, prepare, and enforce the use of forms in relation to the assessment of property.
  4. To hold regular meetings at the State Capitol on the second Monday of each month and such other meetings as the Chairman might call.
  5. To assess annually the franchise, roadways, roadbed, rails and rolling stock of all railroads operated in more than one county in the state.
  6. To equalize the assessment of each mortgage, deed of trust, contract or other obligation by which a debt was secured and which affected property situated in more than one county and to apportion such assessments to the counties.
  7. To apportion to the different counties concerned the assessment of railroads and mortgages.
  8. To meet at the State Capitol on the third Monday in August and remain in session (Sunday excepted) until the third Monday in September.
  9. At such meeting the Board was to equalize the assessment of property in the various counties and fix the state rate of taxation.
  10. To visit as a board, or as individual members thereof, the several counties of the state, for the purpose of inspecting the property located in the county and of ascertaining its value.
  11. At such visit, to call before it, or any member thereof, any officers of the county and require them to produce any public records in their custody.
  12. To issue subpoenas for the attendance of witnesses or the production of books.
  13. To appoint a clerk and prescribe and enforce his duties.
  14. To file with the Governor, biennially, a statement showing:
    • the acreage of each county in the state that is assessed;
    • the amount assessed per acre;
    • the aggregate value of town and city lots;
    • the aggregate value of all real estate in the state;
    • the kinds of personal property and the value of each kind;
    • the aggregate value of all personal property;
    • information relative to the assessment of property and the collection of revenue; and
    • any further suggestions the Board might deem proper.
  15. To keep a record of all its proceedings.

Vested with such powers by both the Constitution and the Legislature, the Board understandably undertook its duties with some zeal. The new Members immediately began visiting most of the state’s counties and noted numerous assessments. Before taking action, however, the Board ordered various individuals to appear before it and show cause why their assessments should not be increased. These orders were vigorously opposed. On September 4, 1880, Wells Fargo and Company and several other firms and corporations filed for writs of prohibition to prevent the Board from making increases in their assessments. Temporary writs were granted and the Board was ordered to appear in court on September 10, 1880 to defend its actions.30 On September 18, 1880 the Supreme Court ruled that Article XIII, Section 9 of the Constitution of 1879 empowered the Board to adjust the assessments of entire counties, but not individual assessments. The Board petitioned for a rehearing but the request was denied.

Although the Board responded to this decision by not raising any assessments in the year 1880, it showed little hesitation in asserting its authority to lower or increase county assessments in subsequent years. The challenge raised by the Wells Fargo case proved relatively insignificant in light of future developments.

25 Fankhauser, op. cit. p. 272

26 Constitution of the State of California, Adopted in Convention at Sacramento, March 3, 1879. Edited by Edward F. Treadwell, 5th Edition, San Francisco: Bancroft Whitney Co. 1923.

27 Debates of the Constitutional Convention of 1879. Remarks of Mr. Howard, Quoted in California Legislature. Property Assessments and Equalization, Part VI of the Report of the Senate Interim Committee on State and Local Taxation. Sacramento: State Printing Office, 1953.

28 Constitution of State of California, Article XIII, Section 10

29 Amendments to the Codes, 1880, Chap. 40, Sec. 3692, p. 25

30 Wells Fargo and Company v. State Board of Equalization, 56 Cal. 194