HomeMy WebLinkAboutMINUTES - 09102013 - C.128RECOMMENDATION(S):
APPROVE AND AUTHORIZE the County Administrator to send a letter to the State Board of Equalization on
behalf of Contra Costa County requesting that the State Board of Equalization initiate rulemaking to reenact Rule
474, which allows oil refineries to be valued as a single unit.
FISCAL IMPACT:
No fiscal impact.
BACKGROUND:
On January 1, 2007, the State Board of Equalization (SBE) enacted Rule 474, which provides that the fixtures at a
refinery should be valued together with its land and improvements, unless a contrary factual showing is made. Rule
474 advances accurate assessment of refinery properties by using a market-based approach, which recognizes that an
operating refinery is typically sold as a single operating unit consisting of land, improvements and fixtures.
After Rule 474 was enacted, the Western States Petroleum Association (AWSPA@), a trade association that
represents petroleum refining and exploration
APPROVE OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
Action of Board On: 09/10/2013 APPROVED AS RECOMMENDED OTHER
Clerks Notes:
VOTE OF SUPERVISORS
AYE:John Gioia, District I Supervisor
Candace Andersen, District II Supervisor
Mary N. Piepho, District III Supervisor
Karen Mitchoff, District IV Supervisor
Federal D. Glover, District V Supervisor
Contact: Lisa Driscoll, County Finance
Director (925) 335-1023
I hereby certify that this is a true and correct copy of an action taken and entered on the
minutes of the Board of Supervisors on the date shown.
ATTESTED: September 10, 2013
David Twa, County Administrator and Clerk of the Board of Supervisors
By: Stephanie Mello, Deputy
cc:
C.128
To:Board of Supervisors
From:David Twa, County Administrator
Date:September 10, 2013
Contra
Costa
County
Subject:Request to State Board of Equalization to Initiate Rulemaking to Reenact Rule 474 Allowing Oil Refineries to be
Valued as a Single Unit
BACKGROUND: (CONT'D)
companies, filed a lawsuit claiming that Rule 474 was invalid as inconsistent with Proposition 13 and related
statutory enactments, and therefore was an unlawful exercise of the SBE’s rulemaking authority. WSPA also
contended that the rule was procedurally invalid because the SBE failed to assess the economic impact of the
regulation as required by the Administrative Procedures Act (“APA”).
After the trial court and the Court of Appeal held Rule 474 invalid on both grounds, the California Supreme Court
granted review. On August 5, 2013, in Western States Petroleum Association v. Board of Equalization [(August 5,
2013) S200475], the California Supreme Court ruled that Rule 474 is consistent with applicable constitutional and
statutory provisions, and it is also consistent with the long-standing valuation principle that the proper appraisal unit is
the collection of assets that persons in the marketplace buy and sell as a single unit. At the same time, however, it held
that the SBE failed to provide an adequate assessment of the rule’s economic impact as required by the APA. Thus,
although the Court found that Rule 474 is procedurally invalid under the APA, Rule 474 may be reenacted if the SBE
adheres to the requirements of the APA.
CONSEQUENCE OF NEGATIVE ACTION:
The State Board of Equalization would not receive formal notice of the County’s position on this issue.
CHILDREN'S IMPACT STATEMENT:
None.