EMERGING LEGAL ISSUES: VALUATION AND EXPENDITURE LIMITATIONS, TOXIC WASTE IMPACTS, AND INTANGIBLES VALUATION
Mark G. Ancel
Several recent and emerging legal issues that impinge upon the object of uniform taxation of property according to market value are considered in this chapter. 1 These include restrictions on property valuation for tax purposes, the problem of requirements to clean up environmental damage to properties as they relate to ad valorem taxation of those properties, and the tendency of certain standard valuation procedures to include the value of non-taxable intangibles in the value of taxable properties in some instances.
A 1978 conference on tax and expenditure limitations held at the University of California, Santa Barbara, followed enactment of Article XIIIA of the California Constitution pursuant to an initiative known as Proposition 13. I recommend that you revisit the proceedings as set forth in a special issue of the National Tax Journal, particularly the discussion of William H. Oakland titled "Proposition 13--Genesis and Consequences" ( Oakland 1979). A little more than ten years later, the National Tax Journal had an article titled "Did Serrano Cause Proposition 13?" suggesting that the decision of the state Supreme Court in Serrano v. Priest ( 1971) caused the enactment of Proposition 13 ( Fischel 1989). Serrano held that reliance on local property taxes to finance public schools was unconstitutional because of the wide disparities in taxable property among the varying school districts. That is to say, reliance on local resources was held to violate the equal protection clauses of the California and U.S. constitutions.
Under Article XIIIA, ad valorem tax on real property is limited to I percent of the "full cash value," which is defined to mean the county assessor's valuation as determined for the 1975-76 tax bill, as adjusted following a change of ownership at