Opinion ID: 4658989
Heading Depth: 1
Heading Rank: 9

Heading: Analysis of Parties' Arguments: H. Recent Amendments to Ad Valorem Statutes

Text: ¶ 54 In April 1987 the legislature started amending the ad valorem statutes after the then recent: (1) federal court litigation limiting, but not completely extinguishing, a taxpayer's equitable claims to interest as a form of damages, (2) recent decisions in other states showing disagreement on (a) an implied contract theory taxpayer's right to interest, and (b) the necessity of a statute requiring investment of protested taxes and payment of interest on a refund; and (3) an opinion by the Court of Civil Appeals recognizing a taxpayer's right to accumulated interest if the protested payment had been invested by a county treasurer. ¶55 The legislature started amending the ad valorem statutes and initially made three important changes. The Legislature amended 68 O.S. § 2467 and required (1) the protested taxes be placed in an investment medium which will permit prompt refund, (2) the amount to be refunded to include the difference between the amount paid and the correct amount payable with accrued interest , and (3) the procedure to be applicable to taxes paid on or after July 1, 1986. 108 Although section 2467 was repealed and renumbered in 1988, effective Jan. 1, 1992, 109 the new procedure provided in the 1987 version of § 2467 was continued by 68 O.S. § 2884, and it required the collecting officer to invest the protested tax, payment of the refund with accrued interest, and any remainder properly taxable with its accrued interest was apportioned as provided by law. 110 ¶56 This statutory scheme followed the principle in Bd. of Educ., Woodward Pub. Schools v. Hensley , supra , which stated interest upon the protested tax would be apportioned to the taxpayer based upon the amount of taxpayer's refund. The legislature determined between conflicting public policies on the issue of paying interest on an ad valorem tax refund and provided a procedure for accomplishing payment of interest. ¶57 Section 2469, a claim of illegality when no appeal was provided, was not amended in 1987, and its renumbered version in the new ad valorem code, 68 O.S. § 2886, did not require the treasurer to invest the protested tax payment and did not provide for payment of interest. However, the legislature later referenced the two procedures, §§ 2884 & 2886 together by a 2000 amendment to 68 O.S. § 2886 which stated the procedure in § 2886 follows the procedure in 68 O.S. § 2884, 111 and this procedure continues in the current version codified at 68 O.S.2011 § 2886. ¶58 The statutory language requiring investment of the protested payment by the county treasurer and payment of accrued interest to the taxpayer appeared in the 1991 and 2001 versions of 68 O.S. § 2884. 112 The 2008, 2011, and 2015 versions of § 2884 (C) & (E) also provide for the protested tax payment to be invested and accrued interest paid to a taxpayer. 113 ¶59 In 2001 the treasurer was required to invest the protested taxes in the same manner as the treasurer invests surplus tax funds not paid under protest, but the investment medium had to permit a prompt refund. 114 This language was amended in 2008 to require the treasurer to invest tax payments in an interest-bearing investment which would permit a prompt refund. 115 More importantly, in 2008 the legislature expanded a taxpayer's rights by adding language giving a taxpayer the right to select an investment for a protested tax payment when in excess of Fifteen Thousand Dollars ($15,000.00). 68 O.S.Supp.2008 § 2884 (C). This language gives an important right to a taxpayer in directing investment of a protested tax payment. We decline to adopt the taxpayers' view herein which would limit a taxpayer's right to control this investment to the stage of an ad valorem tax protest appeal prior to a District Court judgment. ¶60 This portion of § 2884 (C) resolves an unstated but necessarily implied argument made by taxpayers: the rate of interest on a protested tax payment earned after a taxpayer's judgment should be treated as a substantive concern in equity and not a mandatory procedural element in an exclusive statutory tax remedy; and when so treated a taxpayer using a general and ordinary postjudgment statute achieves a more equitable result due to a potentially higher rate of interest. This type of equitable argument is not new. 116 The legislature provided a solution for a taxpayer concerned with the rate of interest on a protested ad valorem tax payment. When the protested tax payment exceeds $15,000.00 the taxpayer may elect the type of investment. 68 O.S. § 2884 (C). ¶61 We have addressed the taxpayers' arguments herein to determine if accrued interest is ambiguous as well as addressing the assessor's claim of conflicting statutes in order to determine if 68 O.S. § 2884 fails to be plain or lacks clarity for the purpose of expressing legislative intent and purpose. When the legislature has spoken and addressed a legal issue using plain, clear, unambiguous language which is within the sphere of the legislature's authority, then this Court applies the language without needing to apply rules of statutory construction. 117 We have concluded the language providing for payment of interest in 68 O.S. § 2884 is clear and controls taxpayers' claims. Taxpayers' implied claim challenging the interest rate in equity must be rejected. Equity follows the law and equity will not be used to correct a party's failure to use what the law provides. 118 Taxpayers had the option of using the procedure in § 2884 in order to obtain a higher interest rate. 119 We need not address herein whether the legislature has rationally, or by some other standard, deemed $15,000.00 as a proper threshold amount for a potential equitable interest using a de minimis standard. 120 ¶62 The phrase final determination of the appeal is not tied to the date the accrued interest shall be calculated in § 2884. The phrase final determination of the appeal may not be read in isolation from the rest of the statute. Generally, postjudgment interest is applied to an adjudicated obligation which creates a continuing obligation to pay from the date of the adjudication; i.e. , the obligation becomes due on the date of the adjudication, unless some legal attribute of the proceeding makes the duty to pay arise at a date after the adjudication. 121 One reason the final determination of the appeal is not tied to the calculation of interest is because the government is still holding the protested tax payment after that date, and the obligation to pay does not arise until a corrected assessment by the county assessor is certified to the county treasurer and a taxpayer's verified claim is filed. 68 O.S.Supp.2015 § 2884 (E)(1). This verified claim includes the accrued interest and application of 12 O.S. § 727.1 is superfluous. ¶63 The language of 68 O.S. § 2884 on the issue of accrued interest is clear and free of ambiguity. When the language of a statute is plain and clear it will be followed by the Court, and when further inquiry is needed, this Court is not free to rewrite the statute. 122 Taxpayers' argument equating accrued interest in § 2884 with prejudgment interest incorrectly rewrites the plain language of 68 O.S. § 2884.