Court Opinion

ID: 9529667
Source: CourtListenerOpinion
Date Created: 2023-08-07 03:53:10.77655+00
Date Added: 2024-06-11T13:27:53.395209
License: Public Domain

KENNARD, J., Concurring.
In California, personal property, unless expressly granted an exemption, is subject to an ad valorem tax, which is a tax levied on property in proportion to its value. (Rev. & Tax. Code, § 201.) All personal property must be assessed at 100 percent of its fair market value. (Id., §401.)
The lawsuit in this case, a coordinated action against 18 counties for a refund of personal property taxes for the years 1985, 1986, 1987, 1988, and 1989, was brought by 10 commercial airlines. They alleged that while their personal property was assessed at its full value, as provided under the law, the commercial and industrial personal property of others was assessed at amounts below full value, resulting in discriminatory assessments against the airlines, in violation of the Airport and Airway Improvement Act of 1982 (AAIA). (49 U.S.C. § 40116(d), formerly 49 U.S.C. Appen. § 1513(d) (hereafter former section 1513(d)).)1
The majority holds: (1) the airlines have a private right of action for de facto discrimination under former section 1513(d) (maj. opn., ante, at pp. 1131, 1132); (2) to establish such discrimination in this case, the airlines must prove that the underassessment of other commercial and industrial property “results from a practice or policy on the assessor’s part that is either targeted to disadvantage or that has an unreasonably disparate effect on the Airlines” (maj. opn., ante, at p. 1136); and (3) the airlines may not establish a violation of former section 1513(d) by comparing the assessment ratio of their personal property to the assessment ratio of railroad personal property (maj. opn., ante, at pp. 1137, 1139). I agree with each of these holdings.
I write separately to express my concern that the majority opinion, because it permits the airlines to maintain a cause of action against the *1141counties for a refund, may be read to imply that the airlines will necessarily be entitled to a refund if they show that the counties have in their taxation engaged in de facto discrimination. In my view, a refund should not be available as a remedy to the airlines without first affording the government an opportunity to redress the discrimination by correcting the underassessments of other commercial and industrial property.
In this case, the airlines concede that their personal property was assessed at 100 percent of fair market value (maj. opn., ante, at p. 1119 fn. 5), as provided under state law (Rev. & Tax. Code, § 401). Their claim is that they paid too much in taxes, not because their personal property was overassessed, but because the commercial and industrial personal property of others was underassessed. So they seek a refund.
In my view, before allowing the airlines a refund (if they succeed in establishing discriminatory assessment) the county assessors should be given an opportunity to end the discriminatory assessment of the airlines by correcting underassessments of other commercial and industrial property. (See, e.g., Allegheny Pittsburgh Coal v. Webster County (1989) 488 U.S. 336, 346 [102 L.Ed.2d 688, 698-699, 109 S.Ct. 633]; Iowa-Des Moines Bank v. Bennett (1931) 284 U.S. 239, 247 [76 L.Ed. 265, 273, 52 S.Ct. 133].) California law requires county assessors to retroactively assess property that has been underassessed. (Bauer-Schweitzer Malting Co. v. City and County of San Francisco (1973) 8 Cal.3d 942, 946-947 [106 Cal.Rptr. 643, 506 P.2d 1019]; Ex-Cell-0 Corp. v. County of Alameda (1973) 32 Cal.App.3d 135, 139-140 [107 Cal.Rptr. 839]; Rev. & Tax. Code, § 531; 1 Ehrman & Flavin, Taxing Cal. Property (3d ed. 1988) § 14:01, p. I.)2 Also, there is no requirement of a refund under the federal statutory scheme. The AAIA requires only that an air carrier’s personal property be taxed the same as *1142other commercial and industrial property. (49 U.S.C. §40116.) There is nothing in the AAIA to suggest that Congress intended to deny local government the opportunity to correct any discriminatory assessments through retroactive assessments and to require instead that the government remedy past underassessments of others by giving a tax refund to an airline that has been properly assessed under state law.
With this reservation, I concur in the majority opinion.

Section 1513(d), which has been recodified in substantially the same form in 49 United States Code section 40116(d), was in effect during the tax years here in issue.

In underassessment cases, the better remedy would be to allow local government to redress any discrimination through retroactive assessments of the underassessed property. To order refunds instead could lead to anomalous results, as the following example illustrates. If 10 taxpayers, 1 of which is an airline, each have commercial and industrial personal property worth $10,000 and the property of 1 of the 9 nonairline taxpayers escapes assessment, 9 of the 10 taxpayers will each have paid $100 in taxes and the 10th will have paid nothing. Under the refund remedy proposed by plaintiff airlines in this case, the trial court, in the hypothetical just given, must order a refund to the airline, rather than compel the assessment of, or allow the government to retroactively assess, the 10th taxpayer’s personal property. So the airline receives a full refund, the nonassessed 10th taxpayer can continue to evade taxation, and the remaining nonairline 8 taxpayers pay taxes at the legally required rate of 1 percent of their personal property’s full value because their personal property is not “air carrier transportation property” and the nonairline taxpayers are therefore not entitled to the benefits of the AAIA. The result is that the eight taxpayers pay $100 each, two “taxpayers,” including the airline, pay nothing, and local government loses 20 percent of its revenues. Such anomalies can be avoided by allowing the county assessors to remedy any discrimination by retroactive *1142assessment of the underassessed properties. This approach comports with our law, which, as demonstrated above, requires our assessors to retroactively assess underassessed property.