The Fourth District Court of Appeal has sided with the County of Los Angeles in its tug of war with the City of Long Beach over the setting of base year property values in a redevelopment area.
The court concluded that the tax assessment role in place when Long Beach approved the redevelopment plan contained the base year property values. The court rejected Long Beach's argument that the base year values should reflect the lowering of some property values by the county's own Assessment Appeals Board.
At issue in this case was how to assign base year property values. The city wanted property values to be as low as possible so that future increases would return to the city's redevelopment agency as "tax increment." The county wanted base-year values to be as high as possible to protect its revenue stream.
The city — pursuant to special state legislation in the wake of the 1992 Los Angeles riots — created a redevelopment area for parts of Long Beach and Signal Hill on September 21, 1993. After adopting the redevelopment plan, the city asked the county to reduce base-year values for certain properties to reflect resolved assessment appeals. A number of property owners had convinced the county to reduce their original 1993-94 tax year assessments.
The county refused, so the city sued. San Bernardino County Superior Court Judge Stanley Hodge sided with the city and ordered the county to lower its base year tax rolls to reflect decisions of the Assessment Appeals Board. But the Fourth District, Division Two, reversed Hodge's decision.
"The crux of the problem here is the determination of the assessment roll ‘last equalized' before the redevelopment plan was adopted," Justice James Ward wrote for the unanimous three-judge panel.
No previous published cases were on point, but Ward cited a 1971 Attorney General's opinion, 56 Ops. Cal.Atty.Gen. 184 (1973), interpreting Revenue and Taxation Code §2050 et seq. The code requires the assessor to submit the last equalized roll on August 20 of each year. The attorney general concluded that "the roll in existence on the August date is the last equalized roll and continues as such … ."
Long Beach argued that the tax roll issued in August of 1993 was not the final equalized roll because the county later made changes. The city essentially argued that the August 1993 roll was only a temporary roll, not a final one.
But the appellate court rejected this notion. The court said the city was adding the term "final," which does not appear in the statutes. Furthermore, if the city did insist that the August 1993 roll was "temporary," then the city should accept as "final" the 1992-93 assessment roll, the court said. The city did not make that argument, though.
"To apply the 1992-93 ‘final' roll would be contrary to the Attorney General's opinion, which did address the question of whether the previous year's final roll or the current year's August roll should be used," Justice Ward wrote.
Furthermore, the "final" adjusted roll for 1993-94 did not come into existence until long after the city approved the redevelopment plan, the court said.
"Had the City of Long Beach wished the tax increment allocation to be based upon a final ‘last equalized assessment roll,' it could have adopted the redevelopment plan ordinance at such a time as it became effective at least three days after the assessment appeals board adjourned for the year, so as to incorporate the final assessment values for that year into the allocation formula," Ward wrote.
The Case:
Redevelopment Agency of the City of Long Beach v. County of Los Angeles, No. E021721, 99 C.D.O.S. 7900, 1999 Daily Journal D.A.R. 9987, filed September 22, 1999.
The Lawyers:
For Long Beach: Robert Shannon, city attorney, (562) 570-2205.
For Los Angeles County: Thomas Tyrrell, principal deputy county counsel, (213) 974-1880.
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