COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Counsel

 

DATE:

January 23, 2006

BOARD MEETING DATE:

February 7, 2006

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

 

TO:

Honorable Board of Supervisors

FROM:

County Counsel

SUBJECT:

Claim for Property Tax Refund by Genentech, Inc. for the Tax Years 1994 through 1999

 

RECOMMENDATION:

Deny the claim of Genentech, Inc. (“Genentech”) for refund of property taxes paid for the tax years 1994 through 1999 in the amount of $12,000,000, plus applicable interest.

 

BACKGROUND:

For each of the tax years from 1994 through 1999 the Assessor issued regular assessments for the real and personal property of Genentech located in San Mateo County. For each of those regular assessments the total assessed value was between $540,000,000 and $698,000,000. Based on those values, for each of those six years, taxes were levied in amounts between $5.4 million and $7.2 million. For tax years 1998 and 1999, the Assessor issued Escape Assessments resulting in the levy of additional taxes in excess of $3.4 million. Subject to a $296,176 refund resulting from real property value reductions, Genentech has paid the taxes due for the regular assessments and has entered into an installment payment plan for the payment of the escape assessment taxes.

 

Genentech filed appeals with the Assessment Appeals Board (the “AAB”) to reduce said assessments. These appeals were heard by the AAB, and after hearings that began in November 2004 and ended in May 2005, the AAB issued a Decision and Findings regarding most, if not all, of those assessments. The precise effect of that Decision and Findings on the valuation of Genentech’s real and personal property in San Mateo County is still in the process of being calculated and affirmed by the AAB. With this claim, Genentech is alleging that the AAB decision was incorrect and that Genentech is otherwise entitled to a refund of a portion of said taxes in the amount equal to $12,000,000, plus applicable interest thereon.

 

DISCUSSION:

Genentech offers no new substantive information or arguments in connection with the AAB hearings. This current claim by Genentech is based on arguments that the AAB erred in that it made incorrect findings, conclusions and decisions. We believe that the Assessment Appeals Board decision was correctly decided and no refund is due Genentech.

 

FISCAL IMPACT:

No fiscal impact is anticipated, unless the claim for refund is granted.