W. States Petroleum Ass’n v. Bd. of Equalization

Until 2007, petroleum refinery property was assessed by separately assessing the value of land and improvements separately from the value of fixtures, including machinery and equipment. In light of evidence that petroleum refinery property, including land, improvements, and fixtures, was generally sold as a unit, the Board of Equalization enacted Cal. Code Regs. tit. 18, 474 (Rule 474), which provides that, for purposes of determining Proposition 8 declines in the value of petroleum refinery property, petroleum refinery property is rebuttably presumed to constitute a single appraisal unit - unlike most industrial property. The Western States Petroleum Association sought to invalidate the regulation. The trial court and court of appeal held that Rule 474 was both substantively and procedurally invalid. The Supreme Court affirmed, holding (1) the court of appeal erred in finding that Rule 474 was substantively invalid, as the board was not statutorily or constitutionally prohibited from appraising refinery land and fixtures as a single unit; but (2) because the Board failed to provide an adequate assessment of the rule's economic impact, the rule was procedurally deficient under the Administrative Procedures Act. View "W. States Petroleum Ass'n v. Bd. of Equalization" on Justia Law