El Dorado Palm Springs, Ltd. v. Riverside County Board of Supervisors

McKINSTER, J., Acting P. J., Concurring and Dissenting.

I concur in the majority’s resolution of the issues concerning the assessments for the 1994 through 1997 tax years. However, I disagree with the majority’s analysis regarding the assessment for the 1998 tax year.

Each year, the assessor must assess all taxable property in the county on the lien date to the person who owns that property on that date. (Rev. & Tax. Code, §§ 401.3 & 405, subd. (a).)1 The lien date is the date on which the taxes for a fiscal year attach to and become a lien against the property (§ 117), i.e., “the first day of January preceding the fiscal year for which the taxes are levied” (§ 2192). For example, for the fiscal year of July 1, 1997, through June 30, 1998 (to which the majority opinion refers as tax year 1997 (maj. opn., ante, at p. 1265, fn. 3)), the lien date is January 1, 1997.

In general, real property is assessed on the basis of the lesser of two possible taxable values. (§51, subd. (a).) One alternative is the base year value (i.e., the value of the property at time of acquisition), as adjusted for inflation since the base year, not to exceed two percent each year, to produce the “factored” base year value. (Id., subd. (a)(1).) The other alternative is its full cash, or market, value. (Id., subd. (a)(2).)

In a rising real estate market, the factored base year value will generally be the lower of the two alternatives. But the full cash value of a parcel may *1272drop below the factored base year value “due to damage, destruction, depreciation, obsolescence, removal of property or other factors” (§51, subd. (a)(2)), such as a general decline in market demand. In that event, the assessor must base the assessment on that lower value.

But if the assessor reduces the assessment in a given year to reflect a full cash value lower than the factored base year value, what happens the next year? Under what circumstances may the assessor thereafter resume its reliance on the higher factored base year value?

The Legislature has answered that question in section 51, subdivision (e): “Nothing in this section shall be construed to require the assessor to make an annual reappraisal of all assessable property. However, for each lien date after the first lien date for which the taxable value of property is reduced pursuant to paragraph (2) of subdivision (a), the value of that property shall be annually reappraised at its full cash value as defined in Section 110 until that value exceeds the value determined pursuant to paragraph (1) of subdivision (a). In no event shall the assessor condition the implementation of the preceding sentence in any year upon the filing of an assessment appeal.”

In this case, El Dorado Palm Springs, Ltd., appealed its 1993 assessment, which had been based on the factored base year value. El Dorado argued that the market value of this parcel had dropped below the base year value, and therefore the assessment was too high. The assessment appeals board (AAB) agreed in February of 1997, and reduced the 1993 assessment of the property accordingly.

That decision triggered the statutory provision quoted above, that “for each lien date after the first lien date for which the taxable value of property is reduced pursuant to paragraph (2) of subdivision (a) [i.e., when the full cash value drops below the factored base year value], the value of that property shall be annually reappraised at its full cash value as defined in Section 110 until that value exceeds the value determined pursuant to paragraph (1) of subdivision (a) [i.e., until the full cash value exceeds the factored base year value].” (§51, subd. (e).) In short, the statute requires the assessor to reappraise the property before resorting to the factored base year value as the basis for the next year’s assessment.

In this case, however, the assessor ignored that duty. Although the AAB had decided in February of 1997 that the full cash value of the property had dropped below the factored base year value in 1993, and although no subsequent reappraisals had been done to demonstrate that the full cash value had since risen above the factored base year value, the assessor *1273nevertheless based the 1998 assessment on the factored base year value. Indeed, the assessor did not reappraise the property until after El Dorado had appealed the 1996, 1997, and 1998 assessments. Specifically, the assessors reappraised the property in November of 1998 to defend against the 1996 assessment appeal and in February of 2000 to defend against the 1997 and 1998 assessment appeals.

As the majority seems to concede,2 the assessor violated section 51, subdivision (e), by failing to reappraise the property prior to relying on the factored base year value for the 1998 assessment. Nevertheless, the majority opinion holds that the assessor’s statutory violation was cured by the post-appeal appraisals performed in 1998 and 2000; “[W]hen the reappraisals were finally performed, the tax assessor succeeded in fulfilling the reappraisal requirement of section 51, subdivision (e).” (Maj. opn., ante, at p. 1270.)

I agree that the assessor failed to comply with his duties under section 51, subdivision (e). Once the AAB decided in February of 1997 that the full cash value of the property in 1993 was less than the factored base year value, subdivision (e) of section 51 obligated the assessor to reappraise the property before resorting to the factored base year value as the basis for the 1998 assessment.

But I do not agree with the majority’s conclusion that we should sanction that violation of the law by allowing the assessor to reappraise the property after the 1998 assessment. The Legislature expressly provided that an assessor may not under any circumstances condition its compliance with its obligation to reappraise property before resorting to the factored base year value on the filing of an assessment appeal by a taxpayer. (§51, subd. (e) [“In no event shall the assessor condition the implementation of the preceding sentence in any year upon the filing of an assessment appeal.”].) By allowing the assessor to ignore the statutory requirement to reappraise before raising the assessment and to “cure” that omission with an appraisal performed only after the taxpayer files an appeal, the rule adopted by the majority eviscerates that statutory prohibition.

There may be circumstances under which an assessor’s failure to comply with the clear mandate of section 51, subdivision (e) might be excusable, but the assessor here offered no excuse for his failure to do so. In the absence of *1274any showing of good cause that might excuse the failure to comply with the law, I cannot join in the majority’s endorsement of postassessment appraisals conducted only after the taxpayer appeals.

In my view, the 1998 assessment is invalid because it was made without the statutorily required pre-assessment reappraisal. I would reverse that portion of the judgment that holds to the contrary.

Appellant’s petition for review by the Supreme Court was denied March 19, 2003. -Baxter, J., was of the opinion that the petition should be granted.

All further section references are to this code.

In responding to the taxpayer’s claim that the 1996, 1997 and 1998 assessments are void as a result of the assessor’s failure to follow the statutory procedure, the majority opinion states: “As to the year 1996, there was no failure to follow statutory procedure.” (Maj. opn., ante, at p. 1270, italics added.) By limiting that statement to 1996, it implicitly acknowledges that, as to the other two years, the assessor did fail to follow the statutory procedure.