Idaho State Tax Commission v. Staker ( 1982 )

PER CURIAM.

This matter is before the court on the petition and amended petition for alternative writ of mandamus by the Idaho State Tax Commission.

The action was originally instituted against the auditors of six counties and ultimately amended to incorporate as respondents district judges sitting in four of the respective counties.

Upon receipt of the petitions, this court directed the respondents to file responses and supporting briefs, and attorneys representing all parties, including amicus curiae, the Associated Taxpayers of Idaho, made oral presentations before the court relative to their respective positions.

Original jurisdiction of this court is invoked pursuant to Title 1, Chapter 2 of the Idaho Code and the matter has proceeded pursuant to I.C. § 7-301 et seq. and I.A.R. 43.

There are primarily three central issues raised in this proceeding:

1. Whether the State Tax Commission is empowered and authorized to equalize the assessments of property in all the counties of the state of Idaho, and has the State Tax Commission in this case exercised that power and authority in accordance with the statutes of the State of Idaho and the constitution of the United States and the State of Idaho.

2. Whether the acts requested by the State Tax Commission of the county auditors are ministerial acts subject to enforcement by writ of mandamus.

3. May the respondents contest the tax commission’s actions in a judicial proceeding, and if so, what is the standard of review of the tax commission’s action?

The circumstances which bring the foregoing issues to this court may be summarized as follows. Pursuant to I.C. § 63-605, the Idaho State Tax Commission, sitting as a State Board of Equalization, convened in the first week of August, 1982, to review the assessments of property throughout the state by various categories, as said assessments were performed by the various county assessors. The Board, using various data supplied to it, determined that the property of seven counties as to several categories of property was being assessed at a rate markedly below the average state level and therefore entered its directive to the respective county auditors requiring that the county auditors enter upon the real property assessment rolls of their respective counties certain adjustments to accomplish equalization. The auditor of Boundary County complied but the auditors of six other counties have not complied, either on the basis of their individual decisions not to do so, request by the county commissioners, or in obedience to the temporary restraining orders and preliminary injunctions issued by the respondent district judges which prohibited their compliance. This action proceeds with respect to the counties of Canyon, Twin Falls, Blaine, Gooding, and Caribou. Bonneville has been removed from the case by stipulation.

Regarding Issue No. 1, we think it is clear, and counsel for some of the respondents acknowledge in the hearing before this court, that the tax commission is constitutionally and statutorily empowered and authorized to equalize the assessments of property among the various counties of the State of Idaho. Idaho Const. Art. 7 § 12. I.C. § 63-513. Ada County v. Bottolfsen, 61 Idaho 363, 102 P.2d 287 (1940); Northwest Light Co. v. Alexander, 29 Idaho 557, 160 P. 1106 (1916). From the record, we also conclude that the tax commission procedurally followed the statutes of the State of Idaho in directing the respondent auditors to make the equalization adjustments which are the subject of this litigation, and that those procedures do not violate the due process provisions of either the fifth amendment of the United States Constitution or the due process clause of the state constitution.

With regard to the second issue, we also conclude that it is clear from our prior cases and cases from other jurisdictions that the mandate of I.C. § 63-614 which requires that:

“As soon as the county auditor receives the certified statements [the certified statement from the State Tax Commission showing changes in the assessments] ... he shall enter in the columns in which the items to be corrected appear upon the real property assessment roll, in red ink, all changes and corrections made by the state tax commission in the assessment ...

imposes a “purely ministerial” duty upon the county auditor and that if he refuses to carry out that duty a writ of mandamus will lie to compel his performance of that ministerial duty. People v. Hively, 139 Colo. 49, 336 P.2d 721 (1959); State Tax Commission v. Johnson, 75 Idaho 105, 269 P.2d 1080 (1954).

The third issue raises a more difficult question concerning whether or not the respondents in this action can judicially contest the tax commission’s order, and if so what standard of review is applicable.

In Utah Oil Refining Co. v. Hendrix, 72 Idaho 407, 411, 242 P.2d 124 (1952), this court had under consideration an action where a taxpayer sought and received a writ of mandate from this court compelling the officials of Ada County to comply with an order of the State Tax Commission. In issuing the writ this court stated:

“... the order of the Tax Commission is immune to collateral attack to the same extent as judicial decisions ...”

Similarly, the Supreme Court of Colorado, in People v. Hively, 139 Colo. 49, 336 P.2d 721 (1959), considering a mandamus action by Colorado’s tax commission against a county assessor requiring the county assessor to make additions and corrections in the assessment roll of the county involved, commented as follows:

“... Essentially, this is a jurisdictional conflict between officers of the county and of the state.... ”

The court, in Hively, then, after rejecting the procedural and constitutional arguments raised by the assessor and after holding that the acts requested of the assessor were “purely ministerial” summarized its holding as follows at 336 P.2d 735:

“Thus the Assessor here had no more standing to question the validity of the action of the Board than a lower court has to question the validity of the mandate of a reviewing court. He was obligated to carry out the mandate of the Board. There is no legal justification for his defiance and the district court lacked jurisdiction to hear the case. It follows that writs of mandamus and prohibition are here appropriate.”

Similarly, as in Colorado, the Idaho State Tax Commission is empowered, authorized and directed to equalize the assessments of property of all counties throughout the state. The tax commission is a constitutionally established body pursuant to Article 7 § 12 of the constitution, which provides that the tax commission shall have “such other powers and perform such other duties as may be prescribed by law, including the supervision and coordination of the work of the several county boards of equalization.” The legislature, pursuant to the constitutional mandate, has empowered and directed the tax commission to equalize the assessments throughout the state through the provisions of Chapter 6, Title 63 of the Idaho Code. Accordingly, the action of the State Tax Commission, involved herein, is not only authorized, but mandated.

The respondent county auditors assert that the proper forum for determining the issues involved in this action, are actions before the district courts ’ pursuant to I.C. § 63-202A. A reading of the entire Chapter 6 of Title 63 makes it clear that I.C. § 63-202A involves the assessment function of a county official as distinguished from the equalization process by the State Tax Commission at issue here.

While the legislature in I.C. § 63-3811 has made specific provision for appeal by taxpayers or county assessors to the Board of Tax Appeals from determination of ad valorem taxes made pursuant to I.C. § 63-401 (county commission meeting as a board of equalization), I.C. § 63-2210 (appeals from county board of equalization), I.C. § 63-3049 (income tax assessments) and I.C. § 63-3632 (sales tax assessments), the legislature has made no provision for an appeal to be taken from the decision of the tax commission in equalizing assessments made pursuant to I.C. § 63-605, et seq. Therefore, it is apparent that the legislature did not contemplate that the action of the State Tax Commission in equalizing assessments would be subject to review by either the district courts or by the Board of Tax Appeals. This court largely determined the central issue of this appeal in its 1891 decision of Orr v. State Board of Equalization, 3 Idaho 190, 194, 28 P. 416, referring to the State Board of Equalization, whose powers now are conferred upon the State Tax Commission pursuant to S.L. 1945, ch. 69,

“There is no method of appeal pointed out by statute to secure review of the action of said board. The writ of certiorari is the proper and only means of bringing such action before this court for review.”

As this court stated in Ada County v. Bottolfsen, 61 Idaho 363, 372, 102 P.2d 287 (1940),

“ ‘The State Board of Equalization is a constitutional board, clothed by statutory authority with quasi-judicial powers in regard to the assessment of certain classes and kinds of property. It is given the power exclusively, and it is required, to value and assess the properties of public utilities. It has the right to exercise a fair discretion in expressing its judgment as to the valuation of such property, and when it has once acted, and there is no fraud shown in its judgment, its action is not subject to review.’ (Northwest Light, etc. Co. v. Alexander, 29 Idaho 557, 566, 160 P. 1106)”

Courts from other jurisdictions have noted that if a tax commission or its equivalent, acting as a state board of equalization, acts in bad faith or so arbitrarily as to amount to constructive fraud, its actions may be subject to judicial review in an extraordinary proceeding.

In Panhandle Eastern Pipe Line Co. v. Dwyer, 207 Kan. 417, 485 P.2d 149 (1971) cert. den. 406 U.S. 967, 92 S.Ct. 2409, 32 L.Ed.2d 665, the Kansas Supreme Court articulated the proper scope of judicial inquiry into state equalization matters as follows:

“[I]t has always been the rule of this court that matters of taxation, especially assessments, are administrative in their character and should remain free of judicial interference in the absence of fraud, corruption or conduct so oppressive, arbitrary or capricious as to amount to fraud. (Harshberger v. Board of County Commissioners, 201 Kan. 592, 442 P.2d 5; Mobil Oil Corp. v. McHenry, 200 Kan. 211, 436 P.2d 982).

In the early case of Symns v. Graves, 65 Kan. 628, 70 P. 591, we stated at page 636, 70 P. at page 594 of the opinion:

‘... Matters of assessment and taxation are administrative in their character, and not judicial; and an interference by judges, who are not elected for that purpose, with the discharge of their duties by those officers who are invested with the sole authority to make and estimate value, is unwarranted by the law. The district court could not substitute its judgment for that of the board of equalization, and this court cannot impose its notion of value upon either. These are fundamental principles in the law of taxation, and cannot be waived aside to meet the exigencies of any particular ease ... . ’

Unless there has been fraud, corruption or conduct so oppressive, arbitrary or capricious as to amount to fraud in the assessment, the courts cannot interfere.”

Additionally, in State v. Rella Verde Apts. Inc., 25 Ariz.App. 458, 544 P.2d 675, 681 (1976) cert. den. 429 U.S. 831, 97 S.Ct. 92, 50 L.Ed.2d 95, the court stated:

“This brings us to the vital issue in this case, the method used by the Board in arriving at assessed valuations. By what standard does the court judge the action of the Board? In its task of equalizing taxes, the Board was acting in a quasi-judicial capacity. In the very early case of United Globe Mines v. Gila County, 12 Ariz. 217, 222, 100 P. 774, 776 (1909), the court stated:

‘.... [T]he court may only inquire into such action for the purpose of ascertaining whether the territorial board of equalization had jurisdiction to make the order, or to determine, when the issue be raised, whether the board of equalization acted in bad faith or so arbitrarily as to amount to constructive fraud in adopting its scale of valuation

In the case of Cochise County v. Southern Pacific Company, 99 Ariz. 385, 409 P.2d 549 (1966), the Court quoted United Mines with approval and further stated:

‘Although the board acted on incorrect information, there was no showing that the rate was grossly excessive, or that the action of the board was in fact arbitrary or fraudulent.’ (Emphasis added.) 99 Ariz. at 394, 409 P.2d at 555.

It is thus the law that the burden placed upon the taxpayer in challenging the equalization system is very heavy, and justly so. Appraising is not an exact science, it is merely an estimate of value.... While the Courts can compel boards of equalization and assessors to act, no Court can decide for them what their judgment ought to be.” (Emphasis added.)

In the present action the respondents have made no allegation that the action of the tax commission was fraudulent, or so arbitrary as to amount to constructive fraud. Respondents simply assert that the tax commission had no constitutional authority to override their valuations, and further they question the validity of the “ratio study” utilized by the tax commission in part in calculating the scope of required equalization. We have concluded that the tax commission does have the constitutional authority to override the counties’ valuation, and none of the other allegations presented by the respondents in this case come within the ambit of judicial review as set forth in Ada County v. Bottolfsen, 61 Idaho 363, 102 P.2d 287 (1940).¹

Respondents assert that equalization by the tax commission without opportunity for hearing violates the federal due process requirements.

Respondents further assert that the issuance of a writ of mandate by this court, exercising its original jurisdiction, and thus by-passing the respective district court actions, would effectively deprive the taxpayers of the State of Idaho of due process of law in that it denies them the opportunity to be heard. This issue has been presented in a number of cases throughout the United States, the leading decision being by the U.S. Supreme Court in Bi-metallic Invest. Co. v. State Bd. of Equalization, 239 U.S. 441, 36 S.Ct. 141, 60 L.Ed. 372 (1915), in which Mr. Justice Holmes writing for a unanimous court, in an action involving a challenge of a state board of equalization order to the Denver assessor stated:

“For the purposes of decision we assume that the constitutional question is presented in the baldest way, — that neither the plaintiff nor the assessor of Denver, who presents a brief on the plaintiff’s side, nor any representative of the city and county, was given an opportunity to be heard, other than such as they may have had by reason of the fact that the time of meeting of the boards is fixed by law ....

The question, then, is whether all individuals have a constitutional right to be heard before a matter can be decided in which all are equally concerned, — here, for instance, before a superior board decides that the local taxing officers have adopted a system of undervaluation throughout a county, as notoriously often has been the case ....

Where a rule of conduct applies to more than a few people, it is impracticable that everyone should have a direct voice in its adoption. The constitution does not require all public acts to be done in town meeting or an assembly of the whole. General statutes within the state power are passed that affect the person or property of individuals, sometimes to the point of ruin, without giving them a chance to be heard. Their rights are protected in the only way that they can be in a complex society, by their power, immediate or remote, over those who make the rule .... It appears to us that to put the question is to answer it. There must be a limit to individual argument in such matters if government is to go on.”

Similarly, rulings emanating from the states of Kansas, Nebraska, Maryland, Ohio, and Wyoming have universally held that enforcement of the order of the Tax Commission does not abridge any constitutional right of the taxpayer to be heard.²

The court having considered the amended petition, the responses of the county auditors, and the affidavits, briefs, and all arguments supplied by all parties, concludes that a peremptory writ of mandate should lie.

We are mindful of the stringent statutory timetable imposed upon the counties in their assessment, billing, and tax collecting functions. Accordingly, we retain jurisdiction of this action and the parties until December 31,1982, during which period any party requiring assistance or order of this court in performance of its statutory duties in complying with the peremptory writ of mandate may make appropriate motion.

LET A PEREMPTORY WRIT ISSUE ACCORDINGLY.

BISTLINE, J., does not join in this opinion.

PEREMPTORY WRIT OF MANDAMUS

WHEREAS, it appears from a verified Petition and Amended Petition presented to this Court and filed in the above entitled proceedings that you have refused to correct and complete the assessment rolls of your respective counties pursuant to certifications of real and personal property rolls made by the Petitioner under and pursuant to § 63-612 Idaho Code,

AND WHEREAS, the Court has reviewed said Petition and Amended Petition and has entered an Opinion on even date herewith, ordering the issuance of a Peremptory Writ of Mandamus to compel you to correct and complete the assessment rolls of your respective counties pursuant to said certifications;

NOW THEREFORE, YOU ARE HEREBY COMMANDED immediately upon the service of this Writ upon you to comply with the provisions of I.C. § 63-614, and correct and complete the assessment rolls of your respective counties as required by said I.C. § 63-614, pursuant to the certifications of property rolls made by the Petitioner, copies of which are attached as exhibits to the affidavit of Paul Adams in support of the Petition herein.

IT IS FURTHER ORDERED that the Petitioner serve true and complete copies of this Peremptory Writ of Mandamus upon the respondent auditors herein, and file a certificate of service or return of service with the Court within five (5) days of receipt of a certified copy of this Writ from the Clerk of the Court.

1 . The Tax Commission (although not required to do so) did provide the counties a hearing to present any objections or suggestions relative to the equalization procedure. Some counties declined to participate, others submitted written comments, and some, such as Canyon, participated in extensive evidentiary proceedings, the transcript of which has been supplied to this court. The Tax Commission considered the information before making its certifications.

2 . State ex rel. Miller v. Dwyer, 208 Kan. 437, 493 P.2d 1095 (1972) (no notice required); Hacker v. Howe, 72 Neb. 385, 101 N.W. 255 (1904) (even if some form of notice was required, the statutory provision fixing the time and place of the meeting of the state board was sufficient notice); Leser v. Lowenstein, 129 Md. 244, 98 A. 712 (1916) (statute setting forth the time and place for Tax Commission to meet to conduct its equalization process was sufficient to meet all due process requirements); Hammond v. Winder, 100 Ohio 433, 126 N.E. 409 (1919) (acting in the nature of an equalization board, it is not required to give notice in order that its actions shall be valid). See also 24 A.L.R. 331 (1923); 84 A.L.R. 197; Baker v. Paxton, 29 Wyo. 500, 215 P. 257 (1923) (no notice required to individual taxpayers).