Board of Sup'rs of Linn County v. Department of Revenue

• Citation: 263 N.W.2d 227
• Decision Date: 22 February 1978
• Docket Number: Nos. 2-58954 and 2-59663,s. 2-58954 and 2-59663
• Parties: BOARD OF SUPERVISORS OF LINN COUNTY, Iowa, Merle L. Kopel as Auditor of Linn County, Iowa, and Forrest C. Holveck as Assessor of Linn County, Iowa, Plaintiffs-Appellants, and The Incorporated City of Cedar Rapids, Iowa, Donald Canney as an Individual and as Mayor of the City of Cedar Rapids, Iowa, and Dale Piersall as Assessor of Cedar Rapids, Iowa, Intervenors, and Ralph H. Blackford, Louise Blackford, Curtis J. Hayes, Ralph N. Gordon, Joyce A. Gordon and Milo Machula and Bessie Machula, Intervenors-Appellants, and Joseph Grief, Richard G. Liercke, William F. Olinger, Renald Evans, Michael P. Evans and Thomas J. Evans, Intervenors, and Linn County Farm Bureau, Intervenors, v. DEPARTMENT OF REVENUE of the State of Iowa and Gerald Bair, Director of the Department of Revenue of the State of Iowa, Defendants-Appellees.
• Court: United States State Supreme Court of Iowa

Page 227

263 N.W.2d 227

BOARD OF SUPERVISORS OF LINN COUNTY, Iowa, Merle L. Kopel as Auditor of Linn County, Iowa, and Forrest C. Holveck as Assessor of Linn County, Iowa, Plaintiffs-Appellants and

The Incorporated City of Cedar Rapids, Iowa, Donald Canney as an Individual and as Mayor of the City of Cedar Rapids, Iowa, and Dale Piersall as Assessor of Cedar Rapids, Iowa, Intervenors,

and

Ralph H. Blackford, Louise Blackford, Curtis J. Hayes, Ralph N. Gordon, Joyce A. Gordon and Milo Machula and Bessie Machula, Intervenors-Appellants and Joseph Grief, Richard G. Liercke, William F. Olinger, Renald Evans, Michael P. Evans and Thomas J. Evans, Intervenors, and Linn County Farm Bureau, Intervenors, v. DEPARTMENT OF REVENUE of the State of Iowa and Gerald Bair, Director of the Department of Revenue of the State of Iowa, Defendants-Appellees.

Nos. 2-58954 and 2-59663.

Supreme Court of Iowa.

Feb. 22, 1978.

Eugene J. Kopecky, County Atty., and James W. Affedlt, Asst. County Atty., for plaintiffs-appellants.

Jon M. McCright and Walter L. McNamara, Cedar Rapids, for intervenors-appellants.

Richard C. Turner, Atty. Gen., George W. Murray, Sp. Asst. Atty. Gen., Kevin M. Maggio, Harry M. Griger and Michael Thompson, Asst. Attys. Gen., for defendants-appellees.

David F. McGuire, City Atty., and David P. McManus, Asst. City Atty., Cedar Rapids, for intervenors The Incorporated City of Cedar Rapids, Iowa, Donald Canney as an Individual and as Mayor of the City of Cedar Rapids, Iowa, and Dale Piersall as Assessor of Cedar Rapids, Iowa.

Wayne C. Collins and Gary J. Streit, Cedar Rapids, for intervenors Joseph Grief, Richard G. Liercke, William F. Olinger, Renald Evans, Michael P. Evans, Thomas J. Evans and Linn County Farm Bureau.

RAWLINGS, Justice.

By action for declaratory judgment and other relief plaintiffs and intervenors challenge the constitutionality of newly amended statutory procedure for implementing defendants' property tax equalization order. Plaintiffs appeal pretrial dismissal for lack of authority and standing to sue. Some intervenors appeal adverse adjudication on the merits. We affirm on both appeals.

Because this case primarily concerns the statutory procedure for effectuation of a property tax equalization order, a portrayal of relevant statutes and procedures prescribed therein necessarily prefaces any recitation of the involved factual situation.

Assessment and equalization of property values for taxation purposes are generally governed by Chapter 441, The Code 1975. That same year certain sections of Ch. 441 were amended by the legislature, effective August 15th. 1975 Regular Session of the Sixty-Sixth General Assembly, Ch. 205, hereinafter referred to as Ch. 205. The following procedural outline perforce refers to Ch. 441 before and after enactment of Ch. 205.

At the times here concerned, it was the duty of each county and city assessor to assess all real and nonexempt personal property within their respective assessing districts. § 441.17(2). Personal property was assessed every year. § 428.4. Real property was valued once every four years unless the assessor found certain property had changed in value since the previous assessment. Id. 1975 was a real property assessment year. Id.

Assessments were to be completed no later than April 15th. § 441.28. The assessor was required to notify, by April 1st, those persons whose property valuation had been changed. § 441.23. Extensive procedures for protest of such changes before the local board of review and appeal to district court were provided. See § 441.26 et seq. Eventually the assessor transmitted to defendants Subsequently, the Department adjusted assessed valuations pursuant to statutory and regulatory guidelines. § 441.47. Written notification of proposed equalization order was sent to the county auditor (before passage of Ch. 205 such notice was sent to the assessor). § 441.48, as amended by Ch. 205, § 3. The county could then protest the proposed adjustments at public hearing before the Department. Id.

Department of Revenue and its director (Department), an abstract of the real and personal property within his or her district. § 441.45.

The next steps were governed by § 441.49, which was substantially rewritten by the legislature in 1975. Ch. 205, § 4.

Before enactment of Ch. 205, the Department was to formulate by the third Monday of October a final equalization order and send written notice thereof to the county assessor. After the first of the year but before April 16th the assessor, in accordance with the equalization order, adjusted property values as assessed the previous year. Taxpayers whose property values were affected by the equalization order had the right to object via the same procedure utilized in protesting assessments. §§ 441.37, 441.38, 441.39. Results upon implementation of the order and any protests thereof were finally transmitted to the Department.

After enactment of Ch. 205, written notification of the final equalization order was sent to the county auditor rather than the assessor. The auditor was required to "notify by publication in official newspapers of general circulation any class or classes of property affected by an equalization order." § 441.49, as amended by Ch. 205, § 4. The auditor then added to or deducted from the affected valuations as required by the order.

The local board of review was to reconvene in special session for the month of November to hear protests of individual taxpayers filed by November 15th. The local board did not act upon such protests but rather made recommendations to the Department. Section 441.49 as amended no longer incorporated the statutory procedure for protesting assessments. Neither were such protests nor the auditor's ministerial adjustment duties delayed into the succeeding year.

This new procedure for implementation of the equalization order and provisions for protest thereof is the main target of the instantly precipitated constitutional attacks.

In the present case it appears the Linn County Assessor complied with the above stated assessment procedures and transmitted an abstract to the Department.

September 11, 1975, the Department sent the Linn County Auditor notification of the equalization order's issuance. Linn County voiced timely oral protests at an October 8th public hearing.

October 20th, the Department sent to the Linn County Auditor an issuance notification of the final equalization order. November 4th, notice thereof was published by the auditor in the Cedar Rapids Gazette.

November 1st, the Linn County Board of Review reconvened and heard about 300 protests. Only some of the intervenors filed protests and none received relief by the Department's final order.

Meanwhile, plaintiffs, Linn County and its auditor and assessor (Linn County), filed the aforesaid petition for declaratory judgment and temporary injunction, alleging Ch. 441 as amended by Ch. 205 violated due process clauses of the United States and Iowa Constitutions, and delegation clause of the Iowa Constitution, Art. III, § 1. That petition was later amended reflecting issuance of the final equalization order, with additional prayers for certiorari review and mandamus.

Four groups of intervenors also filed petitions, each making the same basic allegations of constitutional infirmity against the equalization process as those in Linn County's petition. Ralph H. Blackford, Louise Blackford, Curtis J. Hayes, Ralph N. Gordon, Joyce A. Gordon, Milo Machula and Bessie Machula, constitute one group of intervenors.

These parties, hereinafter collectively referred to as Blackford, are Linn County property-owner residents.

November 11th, the Department successfully moved for dismissal as to Linn County and the municipal intervenors for lack of standing and capacity to sue. Linn County gave timely notice of appeal from that dismissal. Blackford and other intervenors thereafter prosecuted the case to its conclusion on the merits.

June 10, 1976, trial court held Ch. 441 as amended by Ch. 205 was constitutional and entered judgment accordingly. Blackford timely appealed.

The first appeal in this case presents an issue as to whether a county or county officer acting in official status has capacity or standing to challenge constitutionality of our legislatively established property tax equalization procedure.

I. A similar problem was presented in Warren County v. Judges of Fifth Jud. Dist., 243 N.W.2d 894, 897 (Iowa 1976), where a county and several resident taxpayers challenged constitutionality of legislation concerning appointment of full-time judicial magistrates. Focusing upon the standing issue this court said:

"Our cases have uniformly held a county lacks the ability to mount a constitutional attack upon state legislative enactments. Brunner v. Floyd County, 226 Iowa 583, 584-585, 284 N.W. 814, 815 (1939); C. Hewitt & Sons Co. v. Keller, 223 Iowa 1372, 1377, 275 N.W. 94, 97 (1937); Scott County v. Johnson, 209 Iowa 213, 221, 222 N.W. 378, 381 (1928). See 16 C.J.S. Constitutional Law § 76b, pp. 245-246. Because, as individuals and taxpayers, certain of the petitioners have sufficient standing, we can and do decline the request we reconsider the rule barring a county from such challenges."

Although the numerous intervenors would similarly justify abstention here, resolution of this recurring problem is now appropriate.

The leading Iowa case on this subject is C. Hewitt & Sons Co. v. Keller, 223 Iowa 1372, 275 N.W. 94 (1937), which involved an action for mandamus to compel a tax refund. Defendant county board of supervisors attempted to justify the auditor's failure to comply with a particular statute on the ground the law was unconstitutional. We determined, however, the supervisors had no authority to raise such a defense, and in so doing said, 223 Iowa at 1377, 275 N.W. at 97:

"Counties and other municipal corporations are, of course, the creatures of the Legislature; they...