Dressler v. County of Alpine

• Decision Date: 03 December 1976
• Citation: 64 Cal.App.3d 557,134 Cal.Rptr. 554
• Court: California Court of Appeals Court of Appeals
• Parties: Fred H. DRESSLER et al., Plaintiffs and Appellants, v. COUNTY OF ALPINE et al., Defendants and Respondents. Civ. 15749.

Page 554

134 Cal.Rptr. 554

64 Cal.App.3d 557

Fred H. DRESSLER et al., Plaintiffs and Appellants, v. COUNTY OF ALPINE et al., Defendants and Respondents.

Civ. 15749.

Court of Appeal, Third District, California.

Dec. 3, 1976.

As Modified Dec. 14, 1976.

David Warner Hagen, Reno, Nev., for plaintiffs and appellants.

Thomas M. Kelly, Dist. Atty., South Lake Tahoe, for defendants and respondents.

FRIEDMAN, Associate Justice.

Plaintiffs are property taxpayers in Alpine County. They paid taxes under protest and filed four separate refund actions in the superior court, which entered a judgment denying relief in all four actions. The taxpayers appeal. Necessity for notice of revaluation by State Board of Equalization

In Action No. 312 plaintiffs object to the assessment of their properties for the 1970--1971 tax year, charging deprivation of notice-and-hearing opportunities guaranteed by due process of law and by statute. According to unchallenged findings of the trial court, plaintiffs' properties were assessed by the county assessor and plaintiffs had opportunity to challenge this valuation; later, the State Board of Equalization increased the valuation of all property on the secured Alpine County tax roll for 1970--1971; the tax roll, as increased by the State Board of Equalization, was filed after the regular assessment period had closed. Plaintiffs received no personal notice of the action of the State Board of Equalization.

In particular plaintiffs complain of noncompliance with former section 1604.1 (now section 1605) of the Revenue and Taxation Code, which at the time in question declared: 'An assessment made outside of the regular assessment period is not effective for any purpose, including its review, equalization and adjustment by the Board of Equalization, until the assessee has been notified thereof personally . . ..' ¹ They contend that the action of the State Board of Equalization was an assessment made outside the regular assessment period within the scope of the statute, thus ineffectual for lack of personal notice to the taxpayers.

Plaintiffs' constitutional and statutory complaints have no merit. Due process is satisfied if notice and an opportunity to question the validity or the amount of the tax is provided at some stage in the proceeding. (People v. Skinner, 18 Cal.2d 349, 355, 115 P.2d 488.) It does not guarantee taxpayers an opportunity to object to intercounty equalization orders of the state board. (Bi-Metallic Investment Co. v. State Bd. of Equalization, 239 U.S. 441, 36 S.Ct. 141, 60 L.Ed. 372.)

Section 1605 requires personal notice of assessments 'made outside of the regular assessment period' in order to provide an opportunity for review of penal and escape assessments imposed after the regular adjustment roll has been completed. (See §§ 501--505, 531--535, 1611; Ehrman and Flavin, Taxing California Property, §§ 263, 473.) The statute deals solely with local (county) equalization of assessments.

The State Board of Equalization, in contrast, engages in intercounty equalization; it acts upon the entire county roll, adjusting it to achieve intercounty conformity; it does not 'assess' individual properties. (Cal.Const., art. XIII, § 18; § 1821; Davis v. Pacific Improvement Co., 137 Cal. 245, 252, 70 P. 15; Wells Fargo & Co. v. State Bd. of Equalization, 56 Cal. 194, 196--199; see also, Gould, The California Tax System, West's Annot.Rev. & Tax Code, p. 105.) Its action is not an 'assessment made outside of the regular assessment period' within the meaning of section 1605. ²

The trial court correctly denied relief in Action No. 312.

Taxability of Grazing Rights on Federal Land

In Action No. 326 the trial court sustained the county's imposition of 1971--1972 property taxes on possessory interests consisting of cattle-grazing rights on seven parcels of United States Forest Service land.

The Forest Service land is snowbound and unavailable for grazing until about June of each year. Thus the Forest Service did not actually issue annual grazing permits to plaintiffs until sometime after March 1, the 'lien date' for California property taxes. ³ Plaintiffs had no written grazing permits for these parcels on March 1, 1971, nor a legally enforceable right to receive them.

Possessory interests of private persons in federally owned property constitute a species of taxable property. (Kaiser Company v. Reid, 30 Cal.2d 610, 618, 184 P.2d 879.) By statute, a possessory interest includes '(p) ossession of, claim to, or right to the possession of land . . ..' (§ 107, subd. (a).) Private and government contracts and permits create such a variety of interests that the boundaries of possessory interest definitions cannot be precisely fixed; whether a particular interest is a taxable possessory one is a question for case-by-case resolution; the principal factors are exclusiveness, independence, durability and private benefit. (Wells Nat. Services Corp. v. County of Santa Clara, 54 Cal.App.3d 579, 583, 126 Cal.Rptr. 715.)

In Board of Supervisors v. Archer, 18 Cal.App.3d 717, 725--726, 96 Cal.Rptr. 379, this court held that grazing permits on federal land, although temporary and revocable, endow the permittee with possession and valuable use sufficient to create a possessory interest. Plaintiffs rely heavily on a dictum in a footnote of the Archer opinion. There we declared: 'It is claimed that some of the permits are not granted until after the first Monday in March. If a person did not own a permit on that date, he obviously could not be taxed.' (Id., at p. 725, fn. 1, 96 Cal.Rptr. at p. 385; see Ehrman & Flavin, Op. cit. (June 1976 Supp.) § 50, p. 33, notes 13.3, 13.4.)

The Archer footnote deals with the durability factor in possessory interest determinations; that factor, in turn, evokes consideration of the recurrent character of federal grazing permits. Here the trial court found that plaintiffs had been granted annual permits for these same parcels for many years prior to 1971 and would continue to receive these same permits in the future so long as they put them to yearly use. The parties do not tell us whether the element of recurrency rests upon custom or upon an articulated renewal policy of the Forest Service. The taxpayers, at any rate, do not challenge these findings. Their legal position vis-a-vis these grazing permits differs from that of grazing permittees generally only as regards the annual issue date.

Plaintiffs' grazing permits are assets of economic value just as are those issued before March 1. Plaintiffs' grazing rights differ physically but not legally from the latter. Plaintiffs graze their cattle at high altitudes which are snowbound on March 1; other permittees utilize grazing lands at lower altitudes, thus needing and receiving their Forest Service permits by March 1. Within the span of each annual grazing season, plaintiffs' grazing privilege has relatively brief duration. This curtailment may bear on valuation but not on taxability. Relative to the element of year-by-year recurrence, plaintiffs' grazing privileges are just as durable as those based on permits issued before March 1. A history on March 1 of recurrent use and possession is just as significant as an interval of use and possession which actually embraces the lien date.

In the exercise of its statutory authority to adopt regulations promoting statewide uniformity among assessors (Gov.Code, § 15606), the State Board of Equalization has adopted a regulation describing its own concept of the durability factor. ⁴ Subdivision (b)(2) of the rule, quoted in the margin, recognizes that a history on the lien date of recurrent use and possession may satisfy the element of continuity even though the span of actual possession and actual use may not include the lien date. Although not binding, the state board's authoritative expression is entitled to deference. (Ralphs Grocery Co. v. Reimel, 69 Cal.2d 172, 179, 70 Cal.Rptr. 407, 444 P.2d 79.) The board's view reinforces our own--that a history on the lien date of recurrent use is just as significant as the annual time span of use.

The present discussion leads to a reappraisal of our footnote in Archer v. Board of Supervisors, supra. Suffice it to say that the Archer footnote gave no consideration to the element of annual recurrence; it has no application where there is a prior history of annual permits and an expectation of future annual permits.

As to the other factors of possessory interest determination--exclusiveness, independence and private benefit--suffice it to say that these were discussed in Archer, supra, 18 Cal.App.3d at pages 724--727, 96 Cal.Rptr. 379. There they formed the basis for a conclusion that private grazing permits on federal land are taxable as a matter of law. Plaintiffs' expectation on March 1 that their grazing permits would be issued later in the season endowed them with a 'claim to possession' in the sense that their application would receive its customary, annual recognition by the Forest Service. Thus on March 1 they owned a possessory interest as defined by section 107, subdivision (a).

Valuation of Mountain Properties

Plaintiffs own 33 mountain parcels which they use only for summer grazing of livestock. After their assessments had been increased, they appeared before the county board of supervisors, sitting as a board of equalization, protesting the increased valuations. Equalization hearings in 1971 and 1972 resulted in affirmation of most of the assessor's valuations. Plaintiffs paid taxes under protest and in Actions Nos. 336 and 354 sought refunds. The trial court concluded that the county appraisals were proper and denied relief.

Plaintiffs contend that the county officials erred by applying the comparative sales method of valuation without conducting any comparison of the actual and potential uses of the taxpayers' property and the properties sold. We sustain that contention.

The law presumes that assessment...