Kaiser Steel Corp. v. County of Solano

On appeal from a summary judgment entered in favor of respondents, the single question presented is whether the provisions of Revenue and Taxation Code section 209.5 are restricted solely to vessels used or to be used in the transportation of freight or passengers as determined below. Our analysis compels a negative answer requiring reversal.

Facts

The facts relevant to our discussion are undisputed and recited as follows:

In 1974 Kaiser Steel Corporation (Kaiser) undertook construction at its Vallejo and Benicia marine yards of two massive semisubmersible offshore drilling vessels at a contract price in excess of $50 million. Kaiser claimed the statutory exemption for fiscal year 1976-1977 for the vessels then under construction (and related parts and materials) as of the March 1, 1976, lien date; the exemption was denied by the Solano County Assessor in placing the vessels on the assessment roll for the taxable year. Thereafter, Kaiser paid under protest taxes assessed in an amount exceeding one-half million dollars and filed an application for adjustment with the county board of equalization; the application was ultimately denied. At the equalization hearing, the…