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2 public and can be accessed through the Judicial Branch’s homepage at
3 http://www.courts.state.co.us. Opinions are also posted on the
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5
6 ADVANCE SHEET HEADNOTE
7 November 13, 2017
8
9 2017 CO 104
0
1 No. 16SC51, OXY USA Inc. v. Mesa County Board of Commissioners—Taxation—
2 Abatement—Overvaluation
3
4 The supreme court holds that section 39-10-114(1)(a)(I)(A), C.R.S. (2017), allows
5 abatement and refund for illegally or erroneously levied taxes based on overvaluation
6 caused by taxpayer error. This result follows from the statute’s plain text that allows
7 abatement for “overvaluation” without making a distinction between government- and
8 taxpayer-caused overvaluations. The court rejects the court of appeals’ holding that
9 Coquina Oil Corp. v. Larimer County Board of Equalization, 770 P.2d 1196 (Colo. 1989),
0 and Boulder County Board of Commissioners v. HealthSouth Corp., 246 P.3d 948 (Colo.
1 2011), require a different result. Coquina was superseded by the 1991 legislative
2 amendment that added “overvaluation” as a ground for abatement, and HealthSouth’s
3 holding was limited to intentional taxpayer overvaluations. The supreme court
4 reverses the judgment of the court of appeals and remands for further proceedings.
5
1 The Supreme Court of the State of Colorado
2 2 East 14th Avenue • Denver, Colorado 80203
3 2017 CO 104
4 Supreme Court Case No. 16SC51
5 Certiorari to the Colorado Court of Appeals
6 Court of Appeals Case No. 14CA1914
7 Petitioner:
8 OXY USA Inc.,
9 v.
0 Respondent:
1 Mesa County Board of Commissioners.
2 Judgment Reversed
3 en banc
4 November 13, 2017
5
6
7 Attorneys for Petitioner:
8 The Poe Law Office LLC
9 Alan Poe
0 Rachel Poe
1 Centennial, Colorado
2
3 Holland & Hart LLP
4 Christina Gomez
5 Denver, Colorado
6
7 Attorneys for Respondent:
8 Dufford, Waldeck, Milburn & Krohn, LLP
9 Nathan A. Keever
0 Grand Junction, Colorado
1
2 Attorneys for Amici Curiae Plateau Valley School District 50, Plateau Valley Fire
3 District, and Plateau Valley Hospital District:
4 Ireland Stapleton Pryor & Pascoe, PC
5 Jeffrey S. Hurd
6 Grand Junction, Colorado
7
8 JUSTICE HOOD delivered the Opinion of the Court.
¶1 In 2011, OXY USA Inc. (“Oxy”), made a mistake that caused it to overpay its
property taxes on oil and gas produced from leaseholds in Mesa County. Oxy failed to
deduct certain costs it was entitled to deduct. By the time it realized the mistake, the
protest period had expired. The company nonetheless contends it is entitled to
abatement and refund of the overpayment pursuant to section 39-10-114(1)(a)(I)(A),
C.R.S. (2017). But the county board of commissioners maintains that the
abatement-and-refund provision does not apply here because Oxy was the sole source
of the error.
¶2 Section 39-10-114(1)(a)(I)(A) requires, with some exceptions inapplicable here, a
county board of commissioners to abate and refund property taxes that have been
“levied erroneously or illegally, whether due to erroneous valuation for assessment,
irregularity in levying, clerical error, or overvaluation.” Relying on our precedent, the
court of appeals held that Oxy can’t receive abatement and refund for overpayment due
to its own mistake. The question for us is whether that precedent controls here. We
conclude it does not.
¶3 We hold that section 39-10-114(1)(a)(I)(A) gives taxpayers the right to seek
abatement and refund for erroneously or illegally levied taxes resulting from
overvaluation caused solely by taxpayer mistake. We therefore conclude that Oxy is
entitled to abatement and refund for its overpayment of taxes in the tax year at issue
here. Accordingly, we reverse the judgment of the court of appeals and remand for
further proceedings consistent with this opinion.
2
I. Facts and Procedural History
¶4 Oxy operates oil and gas leaseholds in Mesa County, Colorado. Colorado oil and
gas deposits are treated as estates in real property. Clevinger v. Cont’l Oil Co., 369 P.2d
550, 551 (Colo. 1962). The owners often lease these estates to companies with the
resources to develop them. Oxy is one such company.
¶5 Like all other oil and gas leasehold operators in Colorado, Oxy is required by
statute to file an annual statement containing information about the amount of oil or gas
sold or transported from each of its wellheads, as well as the selling price of oil or gas at
the wellhead. § 39-7-101(1)(c), (d), C.R.S. (2017). The statute defines “selling price at the
wellhead” as the net taxable revenue realized by the taxpayer for the sale of oil or gas.
§ 39-7-101(1)(d). Net taxable revenue is equal to gross lease revenue minus deductions
for costs incurred in gathering, transporting, manufacturing, and processing the oil or
gas. Id. The operator’s annual statement is used by the county assessor to value the
operator’s leasehold for property tax assessment. § 39-7-102(1), C.R.S. (2017).
Leaseholds are valued at an amount equal to 87.5% of the “selling price of the oil or gas
sold from each wellhead.” Id.
¶6 After filing its operator statement in 2012, Oxy discovered that it had failed to
deduct certain allowable costs when preparing its statements for tax years 2011 and
2012. Without those deductions, Oxy over-reported the selling price of its gas at the
wellhead for those years. This led Oxy to overvalue its leasehold and thereby overpay
its taxes. This is undisputed.
3
¶7 When Oxy discovered its error, it filed revised operator statements and
petitioned for abatement under section 39-10-114(1)(a)(I)(A), which allows the
abatement and refund of property taxes erroneously or illegally levied “due to
erroneous valuation for assessment, irregularity in levying, clerical error, or
overvaluation.” Oxy sought abatement for tax years 2011 and 2012, but only the
tax-year-2011 petition is at issue here.
¶8 The Mesa County Board of Commissioners (“County Board”) denied Oxy’s
petition, ruling that it did not satisfy any of section 39-10-114(1)(a)(I)(A)’s enumerated
grounds for abatement.
¶9 The Board of Assessment Appeals (“BAA”) reversed the County Board. The
BAA concluded that due to Oxy’s error on its operator statement, the tax-year-2011
valuation of its property was incorrect. Accordingly, the BAA determined that Oxy was
entitled to abatement and refund for that year.
¶10 The court of appeals reversed the BAA decision, concluding that because Oxy
was at fault for the error in this case, Oxy could not seek abatement on any of the
grounds listed in section 39-10-114(1)(a)(I)(A).
¶11 We granted Oxy’s petition for a writ of certiorari.1
1 We granted certiorari to consider the following issue:
Whether the court of appeals erred in holding that section
39-10-114(1)(a)(I)(A), C.R.S. (2015), which provides for abatements and
refunds of property taxes that “have been levied erroneously or illegally,
whether due to erroneous valuation for assessment, . . . clerical error, or
overvaluation,” does not apply to an overvaluation of oil and gas
4
II. Standard of Review
¶12 This case presents a question of statutory interpretation, which this court
considers de novo. Boulder Cty. Bd. of Comm’rs v. HealthSouth Corp., 246 P.3d 948,
951 (Colo. 2011).
III. Analysis
¶13 Section 39-10-114(1)(a)(I)(A) requires the abatement and refund of property taxes
levied erroneously or illegally due to “erroneous valuation for assessment, irregularity
in levying, clerical error, or overvaluation.”2
¶14 Oxy suggests that if it satisfies one of the listed grounds for abatement, it will
necessarily have shown that any resulting excessive tax was “levied erroneously or
illegally” for purposes of section 39-10-114.3 Because the County Board does not appear
to dispute that point, we will assume, without deciding, that it is correct.
¶15 Oxy invokes three of the four grounds enumerated in the statute: erroneous
valuation for assessment, clerical error, and overvaluation. The court of appeals
concluded, and the County Board argues here, that none of these grounds for
properties resulting from an inadvertent error in declaration schedules
filed by the operator of the properties.
2 In April 2017, the General Assembly made minor amendments to section
39-10-114(1)(a)(I)(A). Ch. 148, sec. 1, § 39-10-114, 2017 Colo. Sess. Laws 494, 494–95.
These amendments do not alter the grounds for abatement and refund, so we do not
discuss them further.
3 Oxy goes further, arguing that all excessive taxes based on erroneous valuation, even
for reasons beyond those listed in the statute, are “levied erroneously or illegally” and
subject to abatement and refund. Because we conclude that Oxy meets the listed
ground of “overvaluation,” we do not reach this argument.
5
abatement applies because Oxy alone made the error leading to overpayment. Thus,
we consider whether section 39-10-114(1)(a)(I)(A) permits abatement for an error caused
solely by the taxpayer. Because we resolve this dispute based on overvaluation, we do
not address Oxy’s alternate arguments.
A. Statutory Interpretation Standards
¶16 When construing a statute, our primary task is to ascertain and give effect to
legislative intent. Prop. Tax Adm’r v. Prod. Geophysical Servs., Inc., 860 P.2d 514, 517
(Colo. 1993). We begin with the plain language of the statute, giving words and phrases
their commonly accepted and understood meanings. Id. If the meaning of the statute is
clear from the language alone, our analysis is complete, and we apply the statute as
written. See Jefferson Cty. Bd. of Equalization v. Gerganoff, 241 P.3d 932, 935 (Colo.
2010). However, if the statute is ambiguous, we may employ aids to construction to
help determine legislative intent. Id. For example, we may consider the object sought
to be attained by the statute, the circumstances under which the statute was enacted, the
legislative history, and the legislative declaration or purpose. § 2-4-203(1), C.R.S. (2017).
B. The Plain Language Suggests Abatement Is Allowed for
Any Overvaluation
¶17 The plain language of section 39-10-114(1)(a)(I)(A) suggests that abatement is
allowed for any overvaluation, even when it is caused by taxpayer error. The statute
authorizes abatement in cases of overvaluation, and it is silent as to whether the source
of the error—be it the assessor or the taxpayer—should affect the availability of
6
abatement based on overvaluation. This silence suggests the source of the error does
not matter.
¶18 Ordinarily, this would be the end of the analysis, but the court of appeals
thought not. It held that our decisions in Coquina Oil Corp. v. Larimer County Board of
Equalization, 770 P.2d 1196 (Colo. 1989), and Boulder County Board of Commissioners
v. HealthSouth Corp., 246 P.3d 948 (Colo. 2011), preclude abatement on overvaluation
grounds when the overvaluation was due to taxpayer rather than assessor error. We
conclude the division’s reliance on these decisions was misplaced.
C. Coquina Does Not Change the Plain Meaning of
Overvaluation
¶19 We next address whether Coquina’s treatment of overvaluation affects the 1991
amendment that added “overvaluation” as a ground for abatement. First, we
determine that the amendment superseded Coquina. Second, we observe that the
amendment’s history reflects legislative intent to take a broader view of overvaluation
than did the Coquina court.
1. The 1991 Amendment Superseded Coquina’s Holding that
Taxpayer-caused Overvaluation Could Not Be Abated
¶20 In Coquina, a taxpayer that had erroneously overvalued its leasehold sought
abatement of taxes based on “clerical error” under an earlier version of the abatement
statute that did not expressly address overvaluation. 770 P.2d at 1197, 1199. We
considered the meaning of “clerical error,” and we noted that the taxpayer had already
had and missed one opportunity to correct its error under the protest statute. Id. at
1197, 1199–1201. In a 4–3 decision, we concluded “that the phrase ‘clerical error’ in
7
section 39-10-114(1)(a) does not encompass an error made by the taxpayer and relied
upon by the tax authority.” Id. at 1199. We perceived “no substantial injustice” in
requiring a taxpayer to check for errors within the protest period after having received a
notice of valuation. Id. at 1201.
¶21 However, two years after Coquina, the legislature amended the abatement
statute to expressly address overvaluation, Ch. 309, sec. 3, § 39-10-114(1)(a)(I)(A), 1991
Colo. Sess. Laws 1962, 1963; it thereby superseded Coquina’s treatment of
overvaluation. As we explained above, the plain text of that amendment makes no
distinction between taxpayer and assessor errors, and we see no reason to infer that the
legislature intended to adopt Coquina’s limitation against taxpayer errors.
¶22 Although we presume that the legislature operates with knowledge of our
precedent, see Pierson v. Black Canyon Aggregates, Inc., 48 P.3d 1215, 1219 (Colo. 2002),
we would stretch that principle too far to impute Coquina’s limitation on an existing
ground for abatement (clerical error) into the legislature’s addition of a new ground for
abatement (overvaluation), see People v. Swain, 959 P.2d 426, 430–31 (Colo. 1998)
(“[T]he legislature is presumed, by virtue of its action in amending a previously
construed statute without changing the portion that was construed, to have accepted
and ratified the prior judicial construction.” (emphasis added)).
¶23 And while the court of appeals noted that the heart of Coquina’s rationale could
extend beyond clerical error to all abatements, Coquina’s holding did not extend that
far, and we decline to extend it now.
8
¶24 Even were we to assume, without deciding, that Coquina somehow leaves the
amended statute ambiguous, the legislative history suggests that a taxpayer may seek
abatement based on overvaluation despite having caused the overvaluation itself. We
review that history now.
2. Legislative History Indicates Intent to Confer Broad Relief
from Overvaluation
¶25 The legislature added overvaluation as a ground for abatement in 1991 in
response to the court of appeals’ decision in 5050 S. Broadway Corp. v. Arapahoe
County Board of Commissioners, 815 P.2d 966 (Colo. App. 1991). In that case,
petitioners sought relief from property-valuation increases, but they failed to timely
challenge the new valuations through the protest procedure set forth in section
39-5-122, C.R.S. (2017). 5050 S. Broadway, 815 P.2d at 968. That procedure allows a
taxpayer to challenge a county assessor’s valuation of property before taxes are levied
based on the valuation. See § 39-5-122. Having missed the deadline for filing a protest,
petitioners in 5050 S. Broadway instead sought to use the abatement-and-refund
procedure under section 39-10-114(1)(a)(I)(A), which becomes relevant after taxes are
levied. 815 P.2d at 968. The county board and the BAA determined that petitioners
were limited to the protest procedure only, and that section 39-10-114(1)(a)(I)(A) did not
apply. Id.
¶26 On appeal, petitioners argued that section 39-10-114(1)(a)(I)(A) did apply, in part
because the alleged error resulted from an overvaluation. Id. at 969. However,
“overvaluation” was not yet one of the enumerated grounds for abatement. See
9
§ 39-10-114(1)(a)(I)(A), C.R.S. (1990). The statute listed only “erroneous valuation for
assessment, irregularity in levying, or clerical error.” 5050 S. Broadway, 815 P.2d at 969.
¶27 Nonetheless, petitioners argued that the General Assembly’s 1988 amendment to
the statute permitted abatement based on overvaluation. The 1988 amendment added
the following sentence to section 39-10-114(1)(a)(I)(A):
No abatement or refund of taxes based upon the ground of errors in
valuation shall be made for taxes levied prior to January 1, 1988; except
that this provision shall not apply to any valuation which is the subject of
an appeal made pursuant to section 39-8-108 which, on the effective date
of this sub-subparagraph (A), is pending or upon which a final order or
judgment has been issued.
Ch. 268, sec. 24, § 39-10-114(1)(a)(I)(A), 1988 Colo. Sess. Laws 1276, 1290–91 (emphasis
added). Petitioners asserted that the catchall phrase “errors in valuation” “essentially
obliterate[d] any distinction between § 39-10-114 and § 39-5-122 in overvaluation cases
and . . . permit[ted] taxpayers to proceed under § 39-10-114 in virtually all
overvaluation cases.” 5050 S. Broadway, 815 P.2d at 969.
¶28 The court of appeals disagreed. It noted that the 1988 amendment did not alter
the statutory grounds for abatement and concluded that the amendment simply
changed the statute of limitations for abatement claims. Id. at 970. The court stated: “In
our view, a more definitive statutory clarification was necessary for the General
Assembly to effectuate a change in the property tax scheme that would allow an
abatement action for essentially all errors in valuation.” Id. at 969–70.
¶29 The General Assembly quickly and directly responded to the court of appeals’
invitation for further clarification. It passed Senate Bill 91-231, amending section
10
39-10-114(1)(a)(I)(A) to explicitly add overvaluation as a ground for abatement. Ch. 309,
sec. 3, § 39-10-114(1)(a)(I)(A), 1991 Colo. Sess. Laws 1962, 1963.
¶30 The legislative declaration accompanying the 1991 amendment is particularly
telling: The General Assembly explained that it was enacting the bill “with the intent of
clarifying” that the court of appeals’ statutory interpretation in 5050 S. Broadway was
incorrect and that any taxpayer has “the right to petition for an abatement or refund of
property taxes levied erroneously or illegally due to an overvaluation of such taxpayer’s
property.” Ch. 309, sec. 1, 1991 Colo. Sess. Laws 1962, 1962.
¶31 The Senate debate before the passage of the bill confirms this intended
meaning—senators explained that the changes were necessary in order to protect
taxpayers from overpayment, noting that taxpayers often fail to realize they have
overpaid taxes until the protest period has passed. Senate Floor Debate on Second
Reading of Senate Bill 91-231, 58th Gen. Assemb., 1st Reg. Sess. (Colo. 1991). One
senator called it “just not right” to take taxes for overvalued property in this fashion
without affording taxpayers relief. Id.
¶32 Two aspects of this history demonstrate a broad legislative change that we
construe as abrogating Coquina’s taxpayer-error limitation. First, contrary to Coquina’s
rationale, the legislature considered the protest statute to be an insufficient remedy for
overvaluations, at least in some circumstances. Second, although taxpayer error was
not directly at issue in 5050 S. Broadway, the legislature’s response indicated intent to
confer broad relief to taxpayers who paid too much due to overvaluation.
11
¶33 The court of appeals also relied on our decision in HealthSouth as foreclosing
abatement. We turn there now.
D. HealthSouth Does Not Foreclose Abatement for
Taxpayer-caused Overvaluation
¶34 In HealthSouth, the taxpayer, HealthSouth, filed personal-property declarations
reporting fictitious assets. 246 P.3d at 950. HealthSouth paid taxes on the reported
property it knew did not exist, and it later sought abatement and refund of those taxes.
Id. at 949. This court concluded that HealthSouth was not entitled to pursue a refund
under the circumstances. Id. at 950. We explained that the personal-property-tax
framework relies upon truthful reporting by taxpayers, and therefore while
HealthSouth’s “intentional over-reporting . . . may have resulted in an overvaluation in
the vernacular sense, [HealthSouth could] not claim a refund based on ‘overvaluation’
as that term is used in the current statutory framework.” Id. at 954.
¶35 While we noted that assessor error may be the most likely cause of
overvaluation, id. at 952, we did not preclude a taxpayer from seeking abatement for
overvaluation due to inadvertent errors. True, we said that because the 1991
amendment was a direct response to 5050 S. Broadway, the legislature likely intended
to address situations similar to the one in that case: “an overvaluation of personal or
real property due to an overvaluation made by the most likely source of such an error—
the assessor, not the taxpayer.” Id. But we ultimately based our conclusion that
overvaluation did not apply on the intentional nature of the taxpayer’s error, and we
even expressly contemplated that “overvaluation” was intended “to include mistaken
12
as opposed to intentional overvaluation by taxpayers.” Id. at 954 (emphases added).
Thus, HealthSouth does not support the court of appeals’ holding here.
III. Conclusion
¶36 We hold that section 39-10-114(1)(a)(I)(A) gives taxpayers the right to seek
abatement and refund for erroneously or illegally levied taxes resulting from
overvaluation caused solely by taxpayer mistake. We therefore conclude that Oxy is
entitled to abatement and refund for its overpayment of taxes in the tax year at issue
here. Accordingly, we reverse the judgment of the court of appeals and remand to that
court for further proceedings consistent with this opinion.
13