75 Cal.App.4th 68, E021721, Redevelopment Agency v. County of Los Angeles
| Date | 22 September 1999 |
| Citation | 75 Cal.App.4th 68,89 Cal.Rptr.2d 10 |
| Docket Number | E021721 |
| Parties | Redevelopment Agency v. County of Los Angeles |
| Court | California Court of Appeals Court of Appeals |
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COUNSEL
De Witt W. Clinton and Lloyd W. Pellman, County Counsel, and Thomas M. Tyrrell, Principal Deputy County Counsel, for Defendants and Appellants.
Alan K. Marks, County Counsel (San Bernardino) and Kevin L. Norris, Deputy County Counsel, for County of San Bernardino and California State Association of Counties as Amici Curiae on behalf of Defendants and Appellants.
Trevor Grimm and Richard D. Gann for Howard Jarvis Taxpayers Association as Amicus Curiae on behalf of Defendants and Appellants.
Robert E. Shannon, City Attorney, Heather A. Mahood, Assistant City Attorney; McDonough, Holland & Allen, Richard E. Brandt and T. Brent Hawkins for Plaintiff and Respondent.
James K. Hahn, City Attorney (Los Angeles) and Dov S. Lesel, Assistant City Attorney, for the Community Redevelopment Agency of the City of Los Angeles as Amicus Curiae on behalf of Plaintiff and Respondent.
No appearance for Real Parties in Interest.
OPINION
WARD, J.
This appeal arises out of a tug-of-war between defendant and appellant Los Angeles County (the County) 1 and plaintiff and respondent Redevelopment Agency of the City of Long Beach (the Redevelopment Agency) over incremental tax revenues generated by county property taxes on properties within the area subject to the redevelopment project. The trial court below ordered the County to lower its base tax rolls for the measuring
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year, effectively transferring to the Redevelopment Agency the incremental property taxes, above the readjusted base, within the redevelopment area for all succeeding years.
The County appeals, contending the trial court improperly ordered the base year tax rolls reduced. Based on our construction of the relevant provisions of the California Constitution, the Revenue and Taxation Code, and the Health and Safety Code, we conclude that the trial court improperly ordered the alteration to the base year tax rolls. Accordingly, we reverse.
Facts and Procedural History
Background of Redevelopment Projects and Tax Increment Financing
A constitutional provision for financing redevelopment projects to relieve urban blight was originally adopted in California in 1952. (See Cal. Const., former art. XIII, § 19, now art. XVI, § 16.) Under these provisions, redevelopment projects are financed by the "tax increment financing" method.
All taxable property within the area to be redeveloped is subject to ad valorem property taxes. The properties lying within a redevelopment area have a certain assessed value as of the date a redevelopment plan ordinance is adopted. A local taxing agency, such as a city or county, continues in future years to receive property taxes on the redevelopment area properties, but may only claim the taxes allocable to the base year value. If the taxable properties within the redevelopment area increase in value after the base year, the taxes on the increment of value over and above the base year value are assigned to a special fund for the redevelopment agency.
Once the redevelopment plan is adopted, the redevelopment agency may issue bonds to raise funds for the project. As the renewal and redevelopment is completed, the property values in the redevelopment area are expected to rise. The taxes attributable to the increase in assessed value above the base year value are assigned to the redevelopment agency, which then uses these funds to retire the bonds. The local taxing agencies still receive taxes attributable to the base year assessed value of the properties within the redevelopment area. This way, the redevelopment project in effect pays for itself. (Redevelopment Agency v. County of San Bernardino (1978) 21 Cal.3d 255, 259 [145 Cal.Rptr. 886]; Redevelopment Agency v. Malaki (1963) 216 Cal.App.2d 480, 432-438 [31 Cal.Rptr. 92].)
The crux of the problem here is how to assign the base year value for the properties within the redevelopment area. If the base year value is low, then
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any augmented value in later years generates more tax increment moneys for the redevelopment agency. If the base year value is high, the property values in later years must increase above that higher level to produce any increment taxes for the redevelopment agency. Naturally, among possible values, the County argues for a higher base year value, and the Redevelopment Agency argues that a lower base year value should be applied.
Article XVI, section 16 of the California Constitution provides the formula for dividing the tax revenues between the taxing agencies and the redevelopment agency:
"(a) That portion of the taxes which would be produced by the rate upon which the tax is levied each year by or for each of [the relevant] taxing agencies upon the total sum of the assessed value of the taxable property in the redevelopment project as shown upon the assessment roll used in connection with the taxation of that property by the taxing agency, last equalized prior to the effective date of ... [the] ordinance [adopting the redevelopment plan], shall be allocated to, and when collected shall be paid into, the funds of the respective taxing agencies ...; and
"(b)... that portion of the levied taxes each year in excess of such amount shall be allocated to and when collected shall be paid into a special fund of the redevelopment agency to pay the principal of and interest on [e.g., bonds, loans, or other funds used to finance the redevelopment project]...."
Pursuant to the powers granted to the Legislature in the constitutional provisions, the Legislature has enacted the Community Redevelopment Law, which repeats language virtually identical to that quoted above. (See Health & Saf. Code, §§ 33670, 33671.) The present dispute arose out of the proper interpretation of the phrase, "assessment roll ... last equalized prior to the effective date of [the redevelopment plan] ordinance ...."
The Long Beach Project
After the civil disturbances in Los Angeles County in April and May of 1992, 2 the Legislature passed special legislation permitting redevelopment in specified areas of Long Beach and Signal Hill.
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(See Stats. 1992, ch. 1253, §§ 1-7, pp. 5987-5991.) 3 The Long Beach City Council adopted a redevelopment plan for the affected areas on September 21, 1993. The parties both argue that the 1993-1994 tax roll year is the base year applicable to this case. In 1995, however, the Redevelopment Agency raised questions about how the base roll was to be defined. The Redevelopment Agency asked the County, the relevant taxing agency, to reduce the base year values for certain properties in the redevelopment area, based on resolved assessment appeals. That is, some property owners had filed appeals of the assessed values of their properties for the 1993-1994 tax year. As a result of a number of successful appeals, the County's assessment appeals board had made determinations reducing the originally stated assessment value for the 1993-1994 year. The Redevelopment Agency argued that the reductions in assessed value after the assessment appeals should reduce the base roll values for purposes of measuring the tax increment allocable to the Redevelopment Agency.
The County refused to reduce the base year assessment roll and the Redevelopment Agency filed a petition for writ of mandate in the Los Angeles County Superior Court. The matter was transferred from Los Angeles County to San Bernardino County pursuant to Code of Civil Procedure section 394.
The court below ruled in favor of the Redevelopment Agency and issued the requested writ. The writ commands the county auditor and assessor to "reduce the sum of the 1993-1994 assessed values of property within the [redevelopment project area] used as the base roll for purposes of computing the allocation of project area tax revenues between the special fund of the [Redevelopment] Agency and the taxing agencies by the amount of the assessed values eliminated from the final equalized assessment roll for 1993-1994 as a result of the resolution of assessment appeals affecting the 1993-1994 assessment roll, and ... [t]o allocate and pay revenues to the special fund of the [Redevelopment] Agency and the taxing agencies for each year after October 23, 1993, based on the [base roll as reduced by all resolved assessment appeals.]"
The County appeals, contending that the reduction in the base roll assessed values gives the Redevelopment Agency an unfair share of tax revenues for the project area. Further, the County argues that the proper base roll is the assessment roll, prepared annually each August, issued in August of 1993, and not the adjusted assessment roll made later in the tax year.
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The Redevelopment Agency argues, in turn, that the trial court properly issued the writ, as the relevant provisions of the Community Redevelopment Law (Health & Saf. Code, § 33670) and the Revenue and Taxation Code require the base year assessment roll to be measured by the final and adjusted tax roll, not the initial August 1993 roll.
We conclude that the "assessment roll ... last equalized prior to the effective date of ... [the] ordinance" adopting the redevelopment plan, means exactly what it says: i.e., that the August assessment in 1993 was the "roll ... last equalized" before the effective date of the redevelopment plan ordinance; the changes in assessed values for the 1993-1994 tax year resulted in a later "last equalized" assessment roll, but the later assessment roll was "last equalized" after, and not prior to, the adoption of the redevelopment plan ordinance.
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